Swissquote Bank Research Team
Swissquote Bank Ltd
Amidst lower Iranian exports, oil prices are dropping, pushed by mounting tensions between Saudi Arabia and the US in the wake of the Khashoggi murder. Brent Crude is below USD 80/barrel while WTI trades below USD 70, both under last weekend’s levels. Investors were hoping that Saudi, the world’s leading exporter, would use its black gold to make itself heard politically. However, Saudi Energy Minister Khalid Al-Falih confirmed intentions to produce 11 million barrels per day and its unwillingness to implement any embargo. Meanwhile, US inventories published Wednesday for the week ending 19 October are expected to remain in positive territory, where they have been since March 2017.
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Still, the global landscape has not changed fundamentally. US sanctions against Iran exports start in 12 days (4 November 2018), and sanctions against Venezuela are ramping up. In the short-term, crude prices are expected to drop slightly, but looking ahead, a bounce is likely.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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