26 Mar 2015
Oil advances on geopolitical jitters from Yemen – Danske Bank
FXStreet (Edinburgh) - Senior Analyst at Danske Bank Christin Tuxen noted the pick-up in crude oil prices following the events in Yemen.
Key Quotes
“Overnight an airstrike led by Saudi Arabia has been launched against Houthi rebels in Yemen”.
“Alleged Irani support to the (shia) rebels has for a while been a thorn in the side of the (sunni) Saudis and allies, and is the reason for the strike”.
“Oil markets reacted promptly to the outlook for renewed unrest in the Middle East region with Brent crude oil jumping close to USD60/bbl overnight to now trading around the USD58 level”.
“While Yemen itself is not a major oil producer with output of a mere 125 kb/d, the country controls part of the Bab el-Mandeb strait, a key crude shipping route through which some 3.8 mb of oil pass every day”.
“Thus, a geopolitical risk premium is back to be priced in oil despite the otherwise increasingly positive outlook for nuclear negotiations with Iran. Thus expect volatility to stay elevated in oil markets for now”.
Key Quotes
“Overnight an airstrike led by Saudi Arabia has been launched against Houthi rebels in Yemen”.
“Alleged Irani support to the (shia) rebels has for a while been a thorn in the side of the (sunni) Saudis and allies, and is the reason for the strike”.
“Oil markets reacted promptly to the outlook for renewed unrest in the Middle East region with Brent crude oil jumping close to USD60/bbl overnight to now trading around the USD58 level”.
“While Yemen itself is not a major oil producer with output of a mere 125 kb/d, the country controls part of the Bab el-Mandeb strait, a key crude shipping route through which some 3.8 mb of oil pass every day”.
“Thus, a geopolitical risk premium is back to be priced in oil despite the otherwise increasingly positive outlook for nuclear negotiations with Iran. Thus expect volatility to stay elevated in oil markets for now”.