The interruption risk analysis at the strategic points of the Middle East suggests that crude oil prices are high compared to historical analogues in the night session, says Daniel Ghali, Senior Strategist of TDS Commodities.
Strait of ORMUZ still open, exaggerated risk premium
“Remember that zero barrels have been interrupted, which suggests a strategic decision to avoid damaging global energy supply. Current prices are consistent with our analysis of three -quarter century of geopolitical risk premiums in oil markets.”
“While Iranian energy exports flow freely, incentives to block the Ormuz Strait are similar to mutually assured economic destruction, which implies little incentive to do so.”
“Even more, more barrels are flowing from Iran as a result of Israeli attacks on internal consumption, and US Shale producers that cover risks at higher prices will probably reduce the minimum price of crude oil if status quo prevails. The ctas are at their maximum long position, but they will only sell significantly below $ 76.85/BBL.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
