The oil market is closing out 2019 with a smaller geopolitical risk premium despite the September attack on Saudi Arabia’s Abqaiq facility exposing a staggering supply vulnerability, reports Platts.
Greg Priddy, Stratfor’s director of global energy and Middle East, argues the oil market can no longer hold onto a risk premium, between hedging and the responsiveness of US shale production.
He added that a sharp premium would only return in the event of a major and prolonged oil supply disruption.
Priddy explained about the other potential geopolitical hot spots next year, including a tinderbox in the Middle East, OPEC’s oversupply woes, the “festering” US/China trade dispute, and the US presidential election.
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Source: Platts
