• 3 minutes Natural gas is crushing wind and solar power
  • 6 minutes OPEC and Russia could discuss emergency cuts
  • 8 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 11 minutes Question: Why are oil futures so low through 2020?
  • 13 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 2 hours So the west is winning, is it? Only if you’re a delusional Trump toady, Mr Pompeo, by Simon Tisdall
  • 2 mins Peak Shale Will Send Oil Prices Sky High
  • 2 hours "Criticism of migration will become a criminal offense.  And media outlets that give room to criticism of migration, can be shut down." - EU Official to the Media.
  • 5 mins Charts of COVID-19 Fatality Rate by Age and Sex
  • 5 hours Fight with American ignorance, Part 1: US is a Republic, it is not a Democracy
  • 5 hours CDC covid19 coverup?
  • 1 hour Oil and gas producers fire back at Democratic presidential candidates.
  • 20 hours “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 7 hours Democrats Plan "B" Bloomberg Implodes. Plan "C" = John Kerry ?
  • 21 hours Who decides the Oil costs?
  • 1 day Blowout videos
Ross McCracken

Ross McCracken

Ross is an energy analyst, writer and consultant who was previously the Managing Editor of Platts Energy Economist

More Info

The Oil Market’s Achilles Heel

Rig

Oil prices have fallen back from their immediate highs following the attacks on Saudi Arabian oil processing and production facilities earlier in September. Nerves have been calmed by the promise of the release of strategic stocks, if required, and by Saudi statements that production levels are returning to normal levels relatively quickly.

Washington appears to have stepped back from direct retaliation and has chosen to tighten sanctions instead. Iran’s announcement September 23 that the British-flagged oil tanker Stena Impero was free to go will also help de-escalate tensions. Given the size and potentially escalatory nature of the event, the market’s reaction has been relatively sober.

Market context

The price reaction to any extreme event is governed by the context in which it occurs and how it impacts short, medium and long-term perceptions of the supply/demand balance.

Minor supply disruptions, or a combination of minor disruptions, can have an exaggerated effect in an already tight market. Even major events, like the attacks on Abqaiq and Khurais, can have only a muted impact, if the supply loss period is short, stocks are plentiful and made available, and most other factors point in a bearish direction.

Beyond the immediate event impact horizon, bearish market factors – the slowdown in the global economy and the increase in non-OPEC production both inside and outside of the US - are unaffected.

Decarbonisation ambitions…




Oilprice - The No. 1 Source for Oil & Energy News