Daily News Egypt

Oil surges above $72 per barrel awaiting regional political movements - Daily News Egypt

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Oil surges above $72 per barrel awaiting regional political movements

Bank of America expects Brent to rise to $90 per barrel

Oil prices in global markets stabilised at around $72.11 per barrel at the close of trading after two Saudi oil tankers were attacked, with markets eyeing political moves in the region that would have a big impact on oil.

Medhat Youssef, former deputy head of the Egyptian General Petroleum Corporation, told Daily News Egypt that the attacks confused the oil markets, because one fifth of the consumption of world oil producers of crude oil in the Middle East passes to the main markets in Asia, Europe, and North America and beyond through the Straits of Hormuz, which separates Iran from the Arabian Peninsula.

The Bank of America Merrill Lynch expected Brent crude oil to rise to $90 a barrel as the trade war between the United States and China ebbed, the dollar fell, and world oil demand increased, along with changes approved by the International Maritime Organization for the fuel shipping rules.

Saudi Arabia has announced attacks on two pumping stations to the East-West pipeline, which is transporting Saudi oil from the fields in the east region to the port of Yanbu on the west coast. It has not had a big impact on the markets after the Kingdom announced that its oil supplies were not impacted.

Saudi Arabia and the UAE are the top and third largest producers respectively in the Organization of the Petroleum Exporting Countries (OPEC), according to the latest survey.

Youssef pointed out that the return of the application of US sanctions on Iran and Venezuela will lead to a further decline in crude exports from OPEC member countries, adding to the restriction of supplies resulting from the agreement led by the organisation. Tensions in the Middle East this week also raised fears of additional supply disruptions.

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