The oil market seems to have put geopolitical risk aside, to focus on signs of a slowdown in demand and on technical signals that are intelligible especially to algorithmic funds. Thus, barrel prices continue to weaken.
The decline also continued on Thursday 18th, despite the new crackdown on sanctions against Venezuela, with which the United States interrupted the truce which for six months allowed the country to export crude oil without limitations. And although Iran has revived the nuclear threat, in the event of a direct attack by Israel: an eventuality that international powers try to avoid, but which the Jewish state does not exclude.
The situation on the international stage certainly cannot be said to be relaxed. Yet, oil has not closed a single session higher since – Saturday 13th – Tehran launched over 300 drones and missiles towards Israel. Brent, which slipped by more than 3% on Wednesday the 17th, lost further ground in the following session, reaching a three-week low (86 dollars a barrel), only to then limit its losses to close at around 87 dollars.
Hope is evidently the last to die. And many analysts continue to declare themselves convinced that in the Middle East there will not be a further, serious military escalation, nor will scenarios capable of compromising hydrocarbon supplies in any way occur. In the absence of further tensions, according to Goldman Sachs the value of crude oil could soon fall by another 5-10 dollars a barrel.
Several experts also trust in the large reserve production capacity, which could come to the rescue in the event of supply interruptions: OPEC in particular today has a “spare capacity” of 6 million barrels per day and if it wanted it could mitigate cuts at any time. In any case, in June, barring new extensions, part of the commitments undertaken by the group will expire: the extra cuts by Saudi Arabia and other countries, which amount to 2.2 million barrels per day.
#oil #react #geopolitical #risks #sanctions
2024-04-18 23:17:35