Oil prices to hit $US100 a barrel within days, says Saul Kavonic | The Business | ABC NEWS
Oil prices are scaling six week highs with the global benchmark Brent crude jumping above $US96 a barrel in Asian trade. The conflict in the Middle East is escalating as the US conducts the 12th night of attacks on Iran. Tehran says the Strait of Hormuz is shut, and Yemen’s Iran-backed Houthi rebels are attacking oil tankers on an alternate oil transport route in the Red Sea.
Saul Kavonic from MST Financial told The Business this is not a new oil shock, but oil shock “1.5, because this is a continuation of the same conflict that began in March. So we’ve been on a roller coaster since then.” He says concerns don’t just stem from the renewed conflict activity, but that crude reserves are at a much lower starting point.
“We now have over a billion barrels of less oil and fuel stocks, which we’ve used up over the last few months.” He said.
The Brent crude oil price peaked above $US120 a barrel at the height of the conflict in April, Saul Kavonic says short of a de-escalation, the price is going one way. “We’re living on the oil market credit card … We’re already at record low stocks… That’s going to max out in the next couple of months. And so I think we’re going to see oil head above $US100 a barrel the next few days.”
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