Forget the biggies.
If just Algeria and Libya were forced to stop production, oil could rocket to $220.
That's according to Nomura (via ZeroHedge):
We have identified three distinct stages of the Gulf war which led to changes in oil prices and we believe we are only at the initial stage of the three stage process for the current MENA unrest. During the initial stage of the Gulf war, prices moved up by 21%. This is comparable to what we have seen recently when oil price went up by 13% since the beginning of the MENA unrest. As we see further evidence of real supply disruption, we will be moving into Stage 2 of the event – during this stage of the Gulf war, prices moved to its peak (up 130%) within a period of two months. On the assumption that prices will move up by the same amount, we could see US$220/bbl should both Libya and Algeria halt their oil production. We could be underestimating this as speculative activities were largely not present in 1990-91.
The firm notes that if these countries go down, spare capacity will basically be lower than ever.
Image: Nomura
Read more: http://www.businessinsider.com/nomura-oil-220-2011-2#ixzz1EnQ7Vxus
No comments:
Post a Comment