100 ordspråk av Kevin Norrish
Kevin Norrish
There is clearly going to be some caution because of the political situation in Iran and the lost production in Nigeria, so the chances of OPEC cutting production is very, very slim.
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There is no obscuring the big picture of rapidly dwindling [gasoline] stock levels, accelerating demand and the growing likelihood of a supply crunch in the not too distant future. Geopolitical tensions also continue to prove a key driver behind the strength in oil prices.
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There's still a lot of uncertainty about the balances in the short term,
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There's still going to be concern about potential hurricanes in the market for a few months. Crude output and refining are so tightly stretched that you don't need a big disruption to put the system under a lot of pressure.
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This couldn't happen at a worse time.
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This is a significant escalation over and above previous events. It's very, very serious indeed.
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This is definitely not about buying up oil resources in order to ship the oil into China.
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This morning's IEA Monthly Oil Market Report counts as a significant blow against the 'demand destruction' thesis that has been the dominant theme driving oil and refined product prices lower over the past week,
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This morning's IEA Monthly Oil Market Report counts as a significant blow against the 'demand destruction' thesis that has been the dominant theme driving oil and refined product prices lower over the past week.
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This supports our view that crude prices will soften as we move through the summer months.
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To use it to manipulate prices would be like a central bank trying to manage a run on a currency - it wouldn't work because it only has so much ammunition.
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U.S. oil inventories have risen rapidly, relative to normal patterns over the last four weeks. At the level of politics and geopolitical risks, the shadows have continued to gather and darken.
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Ultimately, a battle for market influence between geopolitical factors and the flow of U.S. data is likely to be settled in favor of the former.
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Under normal conditions, that would be telling OPEC that a cut is necessary. With Nigeria losing about half a million barrels of production it makes it quite hard for them to justify it.
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Under the wrong circumstances, you could easily see $80 being broken or even higher than that. Any major loss of production is going to give us another major push up.
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