2023-10-18 14:08:35 ET
Peter Tchir, Academy Securities’ head of Macro Strategy wrote in a report published on Wednesday that he is increasing the market risk assessment on the issues caused by the Middle East conflict.
He highlighted three points:
First, Tchir said that Academy Securities’ Geopolitical Intelligence Group finds Iran responsible for Hamas attack on Israel. The risk of escalation by Iran is “medium-high to high.”
A “blind eye” on that belief would allow Iran to continue to sell oil despite sanctions, and energy production and transportation issues would be expected.
Secondly, Saudi Arabia would not increase oil production at this time, he wrote.
They could likely increase production when the barrel is priced above $100, Tchir said, “but only after they have seen how the Israeli response develops.”
And thirdly, when it comes to the war between the State of Isarel and Hamas, he said that the risk of “something bad occurring” during operations is higher than he would admit.
The Geopolitical Intelligence Group said that “we need to be prepared for the risk of some event that creates a new uproar of anger towards Israel,” Tchir said. “The market is somewhat aware of this, but I continue to believe that we are all downplaying this risk.”
Crude Oil Futures ( CL1:COM ) are up 9.93% year-to-date.
Oil ETFs are also generally up:
- U.S. Oil Fund, LP ETF ( USO )
- Invesco DB Oil Fund ETF ( DBO )
- U.S. 12 Month Oil Fund, LP ETF ( USL )
- U.S. Brent Oil Fund, LP ETF ( BNO )
- U.S. Natural Gas Fund, LP ETF ( UNG )
- U.S. Gasoline Fund, LP ETF ( UGA )
More on Crude Oil Futures:
- What To Make Of The Current Geopolitical Situation (Israel) And Implications For Oil?
- Oil Rallies On Middle East Tension
- The Bullish Case For Oil Is Still Compelling
- Israel-Hamas war spurs oil uncertainty, higher geopolitical risk - TD Asset Management
- Commodity Roundup: Crude oil, gold gain as Israel-Hamas conflict deepens
For further details see:
Here is why the Middle East conflict is increasing market risk for the oil industry