The chaos in the Middle East acts as a catalyst for oil prices, according to an analyst.
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Oil prices experienced a real upswing during the Easter week. In a few days, the price has climbed four dollars, and is now at its highest level since October.
– This is due to increasing positivity around the global economy, says oil analyst at SEB, Bjarne Schieldrop to E24.
On Wednesday morning, the price is 89 dollars per barrel.
On Tuesday afternoon, there were also reports that a drone hit one of Russia’s largest oil refineries. It is supposed to be Ukrainian drones, according to Reuters, which also writes that the damage does not appear to be critical.
The refinery attack is one of several from Ukraine in recent weeks, writes the Financial Times.
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Schieldrop explains that the capacity among Russian oil refineries has been reduced by 0.8 million barrels per day. The total Russian capacity is 5.5 million.
The analyst believes that the refinery attacks have little to say, and that we would see it in petrol and diesel prices if the capacity reduction was significant.
Global production is 84 million barrels per day. The production decline thus corresponds to around one per cent, he says.
– Not lost a drop
The atmosphere in the Middle East has also been tense over time with the war between Israel and Hamas. The Iran-backed Houthi militia has carried out a series of attacks mainly targeting Israeli-affiliated ships in the Red Sea.
– Bullets, bombs and tragedies in the Middle East have acted more as catalysts that unleash oil prices on the upside, against the background of a tight market with falling stocks, rather than the real reason for the higher prices, he writes in a report.
The analyst has previously told E24 that if there is trouble there with large quantities of oil being stopped, the price can vary by several hundred percent. So far it has not happened.
– Despite everything that has happened in the Middle East, we have not lost a single drop of oil, he says.
– Steady course
The oil cartel Opec+ is among the drivers of the price rise. There have long been fears of a sharp downturn in the global economy. That would lead to lower demand for oil. As a result, prices could also fall, and Opec+ found itself forced to cut production significantly.
– Opec maintains a steady course in the second quarter as well. There is no sign that the Chinese and American economies are falling apart, quite the contrary.
Schieldrop highlights Monday’s ISM figures for industrial production in the US as one of the macroeconomic highlights of recent times.
The index came in at over 50, specifically 50.3 in March. Levels above 50 are an expression of growth, while levels below 50 indicate decline. That the index turns up has not happened since October 2022.
– Macro-oriented trading strategies seem to follow the general global economic cycle in step «long long If you think that the price in a market will go down, you are short and sell, and conversely you are long and buy if you think prices will rise.» in oil if global production activity expands, he writes in the report.
