HSBC analysts in a notice on oil, restating their Brent crude forecasts:
- lack of provide disruptions and important OPEC+ spare capability helps include oil costs
- “In our view, the muted price response shows that there was a fair degree of geopolitical risk already priced in”
- market believes an escalation right into a broader regional battle is unlikely
- however add the caveat: “Regional escalation cannot be ruled out, and as such we expect the current geopolitical risk premium from the Middle East conflict – around the mid-single digits – to persist”
- if the disaster does escalate, it could not essentially result in provide disruptions
This text was written by Eamonn Sheridan at www.forexlive.com.
