Veteran's Warning: "Should Be in $140-150"
The price of oil should be significantly higher than today's levels if the US continues with the naval blockade of the Strait of Hormuz. This is what oil veteran Jorge Montepeque, CEO of Onyx Capital Groups, tells Bloomberg.
- The level we saw this morning, around $103, does not at all reflect what could happen if the US actually carries this out, says Montepeque, who rather sees an oil price of $140-150 as reasonable.
He calls the US focus on Iran "madness" and that Washington underestimates the consequences a blockade could have globally - especially in Asia and other oil-dependent regions.
Oil rises: “Speaks for higher prices for a longer period”
Oil prices are back above $100 a barrel as the US Navy prepares to block ships from reaching Iran via the Strait of Hormuz, writes Reuters.
At 06:45, fuel oil is trading above $102 a barrel, up 8.5 percent, while WTI oil is rising in close to double digits to $104.8 a barrel.
In practice, the blockade means that up to 2 million barrels of oil per day in Iran-linked flows are stopped.
According to Michael Alfaro, head of the hedge fund Gallo Partners, a blockade of the strait speaks for higher oil prices for “a longer period of time”, because it indicates that the war is dragging on, he tells the FT.
The US will begin the blockade of all sea traffic to and from Iranian ports at 16:00 Swedish time on Monday, the US Central Command says.
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