The hottest Egyptian coup pushed up the risk premi

  • Detail

The Egyptian coup pushed up the risk premium, and oil prices ushered in a supply shock

the Egyptian coup forced the international market to raise the risk premium in the Middle East. Investors are switching to the supply shock mode, and the international spot price of crude oil has been significantly higher than the futures premium. Analysts believe that buying crude oil to see long positions will be one of the best investment opportunities in the future

at present, U.S. crude oil futures hover above $101 a barrel, near a 14 month high, while London Brent crude oil is above $105 a barrel. The spread between US crude oil futures and Brent crude oil has narrowed to $4. In the first half of this year, the US crude oil futures price failed to exceed $100/barrel

in the U.S. crude oil futures market, we can test the k-value coefficient of the spring. In the manual and low-speed mold closing action, we should pay attention to whether there is any phenomenon field such as unsmooth action and abnormal sound. Due to the rise of shale oil production, the power of shorting crude oil is always suppressing the rise of oil price. From a short point of view, the shale revolution in the United States and the rise in production in Iraq may put pressure on oil prices in the medium term, together with the shrinking demand in emerging markets such as China, constitute short reasons. However, this mode of thinking, which has ruled for half a year, is switching to the supply shock mode due to the turmoil in the Middle East

this is also the most fundamental reason for the recent significant fluctuations in energy prices 2 The experimental results can be accessed at will. Looking back on the recent history of the crude oil market, the outbreak of civil war in Libya in 2011 caused a shortage of supply in the global crude oil market, and the subsequent Arab Spring pushed the impact to the peak. Due to the tight supply of crude oil in the market, the price of Brent crude oil reached $127 per barrel. Although China's economic growth has slowed down, overall, the demand for energy in emerging markets is still very strong, and even small-scale supply disruptions will have a significant impact

last year, Saudi Arabia increased its oil production to offset the decline in oil exports caused by Iran's sanctions. Since then, Libyan crude oil has returned to the market. The shale oil supply in North America has increased by at least 1million barrels a day, and Saudi Arabia has reduced its daily oil production by 700000 barrels. These cuts and the production of oil fields in various regions mean that standby capacity is increasing. This also makes the oil market seem to have forgotten the political risks in the Middle East

nowadays, the coup in Egypt, the reshuffle of the government, the Iranian nuclear issue, the civil war in Syria, and the increasing violence in Iraq show that a large number of risks still exist in the Middle East. The futures market will have to reprice the geopolitical risk premium level, significantly raise the existing extremely low premium level, and reverse the existing premium situation in the crude oil spot market

in order to ensure the stability of particle quality, the latest report of JPMorgan's bulk commodity research team believes that the current WTI crude oil forward price curve structure of the New York Mercantile Exchange will undergo a major change. "If crude oil demand is really so weak and crude oil supply is so abundant, why is there still such a strong spot premium price curve in this business cycle?"

the last time such a price curve structure appeared was in 2007, when the price curve became steep at an extremely fast and explosive speed. In less than 9 months, the spot price rose sharply from $65/barrel to the highest nominal price in history of $147/barrel

in response, JPMorgan Chase analysts said, "we expect that when the commodity market begins to rise, crude oil futures will likely rise faster than it seems now, driven by quarterly factors in the global crude oil market." The agency said that it would not expect similar strong price fluctuations again now, but it suggested that buying the spot premium of WTI crude oil futures on the New York Mercantile Exchange was one of the best investment opportunities it had seen in the commodity sector in the past few years

note: the reprinted content is indicated with the source. The reprint is for the purpose of transmitting more information, and does not mean to agree with its views or confirm the authenticity of its content

Copyright © 2011 JIN SHI