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Egypt Events Prompt A Change in the Oil Mindset
by Kent Moors Ph.D. | published February 4th, 2011
As the world awaits developments out of Tahrir Square in Cairo, Egypt – and ripples of discontent begin emerging from elsewhere in the region – European oil analysts are switching perspectives.
There is now a "risk premium" being factored into the calculation of expected Brent prices in London. Today prices are retreating to under $100 a barrel in London and less than $90 in New York.
Yet the overall dynamics continue to point toward a virtual guarantee of levels above $100 a barrel for the near term – on both sides of the pond.
The new risk element is, of course, a result of the political unrest in Egypt and calculations about what that may mean for the wider areas of the Middle East and North Africa (MENA). Yet, just as significantly, it is not a prognosis of supply problems.
What we are seeing is the first stage in a major cycle of volatility in the oil trading market. Egypt may have been the trigger, but it is the trading markets themselves that are creating the problem…
Let me be clear about this. While concerns are expressed about wider MENA impacts from the current unrest, that unrest has had no measured effect on the availability or crude oil or oil products in the global market.
http://oilandenergyinvestor.com/2011...e-oil-mindset/
Egypt Events Prompt A Change in the Oil Mindset
by Kent Moors Ph.D. | published February 4th, 2011
As the world awaits developments out of Tahrir Square in Cairo, Egypt – and ripples of discontent begin emerging from elsewhere in the region – European oil analysts are switching perspectives.
There is now a "risk premium" being factored into the calculation of expected Brent prices in London. Today prices are retreating to under $100 a barrel in London and less than $90 in New York.
Yet the overall dynamics continue to point toward a virtual guarantee of levels above $100 a barrel for the near term – on both sides of the pond.
The new risk element is, of course, a result of the political unrest in Egypt and calculations about what that may mean for the wider areas of the Middle East and North Africa (MENA). Yet, just as significantly, it is not a prognosis of supply problems.
What we are seeing is the first stage in a major cycle of volatility in the oil trading market. Egypt may have been the trigger, but it is the trading markets themselves that are creating the problem…
Let me be clear about this. While concerns are expressed about wider MENA impacts from the current unrest, that unrest has had no measured effect on the availability or crude oil or oil products in the global market.
http://oilandenergyinvestor.com/2011...e-oil-mindset/
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