Damned if you spend, damned if you don't

Ipek Ozkardeskaya ipekScope

US and European markets kicked off the week on a cautious note as yields kept rising alongside energy prices amid mounting tensions in the Middle East that once again threaten the availability of oil and gas in the weeks and months ahead. To that extent, Goldman Sachs is once again calling for crude oil at $120 per barrel. (give me a break!)

US crude traded near $83 per barrel, while Brent spiked above $90 per barrel on news that the Houthis are considering a blockade of the Red Sea to prevent Saudi Arabia from exporting oil through the port of Yanbu. Remember, Saudi Arabia had diverted part of its oil exports from the Strait of Hormuz to the Red Sea, with exports from Yanbu reaching around 4 million barrels per day, helping cushion the near-standstill in traffic through the Strait of Hormuz. Now, these flows are under threat again.

The good news is that fresh reports suggest that a senior Iranian official said mediators had proposed a 10-day ceasefire to revive an interim US-Iran agreement, pulling oil slightly lower this morning. The bad news is that risks remain tilted to the upside.

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Author

Ipek Ozkardeskaya

ipekScope

Ipek Ozkardeskaya began her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked in HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients.

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