Analyzing the situation, Andy Lipow of Lipow Oil associates speaking during an interview on CNBC shared his view on the oil markets: He also added:
Consensus is key
As per Mr. Lipow, the above-mentioned four countries will probably have to be given an exemption on the Russian oil ban since they don’t possess the logistical capabilities to avoid Kremlin’s energy completely. So far, it seems as if the EU will continue to remove Russian energy from their territories, which could result in oil prices increasing. On the other hand, the potential downside to Brent prices currently hinges on China and demand destruction there due to new Covid lockdowns imposed by the state. Based on the price action in oil in the previous weeks, it seems as if market participants are viewing the China issue as a transitory issue. At the height of the Covid lockdowns in April 2020, with the demand for oil almost completely destroyed oil prices went into negative territory for the first time in their history. It is unlikely that a similar scenario can be repeated any time soon; yet, there needs to be some downside risk to rising oil and energy princess across the globe. At the moment it is difficult to recognize what those risks could be, but it’s also highly unlikely that oil prices will continue to climb indefinitely. Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
