Saudi spare capacity, shale hopes keep oil prices in check – but for how long?
The oil market is on tenterhooks as the conflict in the Middle East escalates, with much hinging on Israel’s next move in response to Iran’s recent missile attack. While oil prices have risen, the market remains surprisingly calm, despite the looming threat of supply disruptions.
Ukraine: elephant in the commodities market room
In periods of low interest rates, high stock market prices and persistent inflation, the usually volatile commodity markets are once again in the sights of investors. This is also the case now, but this time there is another complicating factor: 100,000 Russian soldiers on the border with Ukraine, which the US president expects to invade the neighbouring country.
Commentary: new oil crisis imminent
Ultimately, the price of oil is determined by supply and demand. What is special about the oil price is that, in theory, there are several equilibrium prices. This is because a large part of the supply is linked to a state budget. Where normally the supply goes down when the oil price goes down, there are countries that in the past pumped more oil to realise the same yield.
Knowing that the final price is determined by the marginal buyer and the marginal seller, identifying these two parties is essential for predicting the oil price.