Oil prices remain unlikely to exceed $100 per barrel even as conflict between Israel and Hamas continues to intensify. This comes after production cuts from Saudi Arabia and Russia and fuel shortages threatened to send oil prices upwards.
Ed Morse, global head of commodity strategy at Citi, has assured that the rising Middle East tension will not force oil prices above $100. “The good news for the market is that with the cuts that have been taken, we have a good 4.5 to 5 million barrels a day of capacity in the world,” Morse remarked. He added that if oil prices should soar significantly higher, then spare capacity from Saudi Arabia, the UAE, and Kuwait may be released into the market to bring oil prices back down.
Still, Morse insists that there is little chance of price rises in the first place due to a slowing or zero growth in regions including China, Europe, and the United States.