The combination of limited new supply options, increasing risks to traditional supply, and growing demand around the world, is set to send oil prices even higher this summer.
Friday, May 27th, 2022
Oil prices have been edging higher this week as improving demand signals highlight the lack of supply options in oil markets if there is a drastic contraction in Russian production, a likely outcome if the European Union bans Russian oil. With both US crude and gasoline inventories continuing their decline, whilst recent altercations between the United States and Iran have rendered any JCPOA breakthrough largely impossible, analysts are anticipating another surge towards the $130-140 per barrel range this summer.
“You have sown much, and bring in little; You eat, but do not have enough;
You drink, but you are not filled with drink; You clothe yourselves, but no one is warm; And he who earns wages, Earns wages to put into a bag with holes.” Haggai 1:6
EU Pins Hopes for Next Week Summit on Russian Sanctions. The European Union hopes to reach a deal on Russian oil sanctions at next week’s leader summit on May 30-31, with media reports suggesting Brussels will split the embargo into pipeline and seaborne deliveries, allowing more phasing-out time for the former.
US Seizes Two Allegedly Iranian Cargoes in the Mediterranean. The US-Iran antagonism is set to increase further after US authorities seized two laden oil tankers in the Mediterranean, anchored in Croatia’s and Greece’s territorial waters, for allegedly smuggling oil for Iran’s Revolutionary Guard Corps.
G7 Vows to Quit Coal, Fails to Fix Deadline. Ministers from the Group of Seven (G7) agreed to work to phase out coal-powered energy, though the commitment was tangibly watered down from the initial draft of the communique as the 2030 deadline of ending “unabated” coal power did not make it in.
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