Oil is a ‘broken barometer’ and ‘lagging indicator’ of Middle East tensions, energy expert says

0
13

Oil is a “broken barometer” and a “lagging indicator of Middle East stress,” according to Helima Croft, managing director and global head of commodity strategy at RBC Capital Markets.

are underestimating supply-side risks, Croft told CNBC at the Abu Dhabi International Petroleum Exhibition & Conference on Monday.

“We have a market that is singularly focused on the side; the whole idea that Chinese is going to go off a cliff,” said Croft, a closely-watched oil market expert.

Article continues below Advertisement...

But China’s imports are resilient, she added.

In October, crude oil imports into China rose 11.5% from a year earlier to a record high, Reuters reported.

However, investors have been spooked by the fallout from the U.S.-China trade dispute and a , leading to a broader market selloff and lackluster , Croft said.

Middle East, Iran risks
At the same time, they are also brushing off supply risks in the Middle East.

“They’re looking at the Middle East saying ‘it’s noise, we’ve seen this before, even when we had the type of attacks which are almost unprecedented in this market. They are thinking ‘well, we can get over this, we have U.S. production and we have demand worries,’” she said.

Considering U.S. sanctions on Iran, current oil prices are “amazing,” said Croft. The market is “basically saying ‘we are swimming in oil, it doesn’t matter; someone can fill every supply gap,’” she added.

But there are considerations surrounding the oil market that present supply uncertainty, said Croft.

Aside from geopolitical issues in the Middle East, any potential change in the U.S. presidency could also reshape the U.S. energy landscape, as well as the country’s approach toward Iran’s nuclear program, she said.

A recent Reuters survey showed that oil prices were expected to remain under pressure in 2019 and 2020. The poll of economists and analysts international brenchmark would average $64.16 a barrel in 2019 and $62.38 in 2020.

was trading around $61.75 at 5.23 p.m. Hong Kong/Singapore time on Monday.
Source: CNBC

Source: Investing.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here