Traders Buy Middle East Crude At Premiums Amid Rising Geopolitical Risk
Crude traders have been paying premiums for oil cargoes from the Middle East loading next year as geopolitical risks spiked in the past month…
Tyler Durden
"Authored by Tsvetana Paraskova via OilPrice.com,
- Rising geopolitical risk means oil traders have been paying premiums for crude cargoes from the Middle East loading next year.
- While geopolitical risk has added a premium in annual deals, front-month oil futures have fallen back to levels last seen before Hamas attacked Israel.
- The Federal Reserve’s decision not to increase interest rates should have provided some support to prices, but WTI and Brent were down on Thursday.
Crude traders have been paying premiums for oil cargoes from the Middle East loading next year as geopolitical risks spiked in the past month, Reuters reported on Thursday, citing trading sources.
The Hamas-Israel war has increased not only the volatility in crude oil prices but also the risk of a wider conflict, leading to traders willing to pay up for crude supply from Oman and Abu Dhabi in their annual deals that were mostly concluded by late October, according to Reuters’ sources."
"Meanwhile, the front-month oil futures have erased the gains since the Hamas attack on Israel in early October, and Brent Crude traded at around $85 per barrel early on Thursday."