Oil: Disruptions lift prices and speculative longs – ING
ING analysts Warren Patterson and Ewa Manthey note that Brent Oil has broken above US$90 as escalating conflict in the Persian Gulf and potential chokepoint closures disrupt vessel flows. They highlight the end of US SPR releases, rising speculative net longs in ICE Brent and gasoil, and increased vulnerability of the oil market to further supply shocks. Brent rallies on supply risk escalation “ICE Brent broke above US$90/bbl this morning with no let-up in the escalation in the Persian Gulf. The US and Iran continue to exchange strikes, which are proving to be deadly for both sides. If this escalation goes unchecked, we could return to an environment of wide-scale attacks across the Persian Gulf.” “Vessel flows have essentially ground to a halt. LSEG data show that only 2 outbound visible oil tankers transited the Strait of Hormuz, with no inbound traffic. Flows are essentially back to where they were before the Memorandum of Understanding (MoU).” “The issue for the oil market is that SPR releases, which have offered some relief during the war, are set to cease around the end of this month. This leaves the market relatively more vulnerable. Clearly, theres always the potential for SPRs to be tapped further.” “Given the market
