Saudi oil strikes to drive up risk premium in crude market - S&P Global Platts
|Commenting on the weekend attack on the Saudi Arabian oil and gas facilities and its impact on the oil markets, Chris Midgley, Global Head of Analytics at S&P Global Platts, said attacks on Saudi oil plants have boosted concerns about supply security in the Middle East and should raise the risk premium in the global crude market, per Reuters.
Key Quotes:
“The sudden change in geopolitical risk warrants not only an elimination of the $5-10 a barrel discount on bearish sentiment, but adds a potential $5-10 a barrel premium to account for now-undeniably high Middle Eastern dangers to supply and the sudden elimination of spare capacity.”
“As such prices are likely to break out of the current $55-65 a barrel options range, to test the high $70s as currently supported by fundamentals.”
Yemen’s Houthi group claimed responsibility for Saturday’s attacks that knocked out more than half of Saudi oil output, or more than 5% of global supply.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.