Business

Oil Prices Are Being Hit By The Perfect Storm—And Laughing It Off


So when crude was hit with a “perfect storm” this week—from alleged attacks on Saudi ships in the world’s most important oil chokepoint , to the acceleration of the U.S.-China trade war , to name but two highlights—the market surprised observers once again: by more or less shrugging it all off.


Nonetheless, “prices have remained calm, and didn’t show the usual historical reaction to such incidents,” said Sara Vakhshouri, president of SVB Energy International in Washington, D.C.


That’s partly because the incident may not be as significant as it appears, say analysts, who note that there have not been any supply disruptions and there’s still fairly little substantive information, although the U.S. has ordered the removal of all its non-emergency staff from neighboring Iraq.


“There’s a lot of posturing taking place,” between the U.S. and Iran, said Sanam Vakil, an expert in the Persian Gulf at Chatham House in London.


Instead, jitters over geopolitics in the Middle East and worry over potential supply shocks have offset the impact of the trade war, says Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas.


“It might just feel that way,” he said, noting that oil markets have frequently weathered revolution, sanctions, and outright war in the Middle East.






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