• 4 minutes Why Trump Is Right to Re-Open the Economy
  • 7 minutes Did Trump start the oil price war?
  • 11 minutes Covid-19 logarithmic growth
  • 15 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 18 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 1 hour Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 37 mins Trump eyes massive expulsion of suspected Chinese spies
  • 3 hours >>The falling of the Persian Gulf oil empires is near <<
  • 34 mins KSA taking Missiles from ?
  • 1 hour How to Create a Pandemic
  • 4 hours A New Solar-Panel Plant Could Have Capacity to Meet Half of Global Demand
  • 1 hour There are 4 major mfg of hydroxychloroquine in the world. China, Germany, India and Israel. Germany and India are hoarding production and blocked exports to the United States. China not shipping any , don't know their policy.
  • 14 hours Where's the storage?
  • 4 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 11 hours America’s Corona Tsar, Andrew Fauci, Concedes Covid-19 May Be Just a Bad Flu With a Fatality Rate of 0.1%
  • 15 hours Western Canadian Select selling for $6.48 bbl. Enbridge charges between $7 to $9 bbl to ship to the GOM refineries.
  • 3 hours Dr. Fauci is over rated.
  • 6 hours Saudi Arabia Can't Endure $30 Oil For Long
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