Oil: Saudi pipeline outage supports prices – ING
ING analysts Warren Patterson and Ewa Manthey note that Oil prices have surged as the Saudi East–West pipeline shutdown tightens supply and keeps ICE Brent near recent resistance around $110/bbl.
Oil prices skyrocketed as the Saudi East-West pipeline went offline, leaving ICE Brent trading near $110/bbl - a level the market has struggled to surpass over the past three days. Analysts from ING, Warren Patterson and Ewa Manthey, emphasized the uncertainty surrounding the pipeline damage and the length of the shutdown. With storage at Yanbu providing only temporary reprieve, concerns arose that port stocks might exhaust before the pipeline resumes, putting pressure on prices.
The pipeline could remain offline for weeks, according to reports, leaving the market well-supported until more information becomes available. Despite claims of increased exports via the Strait of Hormuz, logistical challenges create doubt about this solution. Despite assurances from Trump, little respite has been seen in middle distillate cracks.
While US bond yields remain near multi-year highs, supported by oil-induced inflation risks, this has strengthened the US Dollar, impacting AUD/USD, USD/JPY, and gold prices.
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