VITOL CEO warns oil may hit $200 as fire erupts at Saudi Arabia’s largest oil field.
Fire Erupts At Saudi Arabia’s Largest Oil Field
October 6 (King World News) – Walter Bloomberg: Unverified reports from Fars note “Fire Erupts Over Saudi Arabia’s Largest Oil Field”
Vitol CEO: Without Middle East Barrels, Oil Faces a “$200 Scenario”
Jack Prandelli: Vitol CEO: Without Middle East Barrels, Oil Faces a “$200 Scenario”
Russell Hardy told that up to 14M b/d has been leaving the Middle East over the past 7 to 10 days.
About 12M b/d is crude and 2M b/d is refined products.
“Without it you do have that $200 a barrel scenario,” he said.
Western inventories are limited, and he said 10 to 14M b/d from the region is needed to keep prices stable and stocks from draining further.
At the same forum, aramco CEO Amin Nasser said Brent could have hit $200 without Saudi Arabia’s East-West pipeline, and called global stocks “scarily thin”.
Two of the most informed people in oil have reached the same $200 figure.
Global inventories have fallen more than 400M barrels since March.
With no buffer left, any break in that 14M b/d flow would show up in prices within days, because there’s nothing in storage to cover it.
Brent at about $100 assumes the barrels keep coming.
Pricing $200 would mean assuming they stop.
Both men have reasons to say it.
Aramco gains from showing its pipeline holds up the market.
Vitol earns more when markets are volatile and supply is tight.
Neither has much reason to play the risk down.
Their numbers still line up with the physical market.
Western stocks are low, refineries are running flat out and the main route around Hormuz runs along a Red Sea coast the Houthis are now targeting.
What’s still uncertain is the 14M b/d itself.
It’s a 7 to 10 day average, built on cargoes moving through a contested strait and a single Saudi pipeline.
If it holds for weeks, inventories can start rebuilding.
If not, the $200 scenario stops being hypothetical….
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Silver
Graddhy out of Sweden: The monthly support trend line held for silver at first backtest.
So far, so good.
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