\n<\/p>\n
Oil rose back above $100 a barrel on Tuesday, after fresh US strikes on Iran dashed hopes of a Middle East breakthrough, with experts saying that whatever the outcome of peace talks, the global energy market may now be past the \u201cpoint of no return\u201d.<\/p>\n
News of the US attacks on missile launch sites and mine-laying vessels pushed the price of Brent crude past the key threshold on Tuesday, as a peace deal remained elusive.<\/p>\n
The conflict and resulting blockade of fossil fuel shipping through the strait of Hormuz have sent oil soaring, topping $126 at the end of last month.<\/p>\n
However, in recent weeks prices have remained significantly below predictions as traders have continued to bet on a diplomatic solution to hostilities that could allow Gulf states to restart production and exports of crude. On Monday, Brent had been trading at about $97 a barrel.<\/p>\n
Market observers say weeks of disruption to oil exports have heavily eroded global stockpiles of crude and fuel, while demand for transport fuels is expected to increase over the summer travel season.<\/p>\n
Analysts at HFI Research said last week that the market had \u201creached the point of no return\u201d and could be due a \u201crude awakening\u201d by the start of next month.<\/p>\n
\u201cIt just seems to be this endless loop of Charlie Brown and Lucy with the football,\u201d said Michael Every, a global strategist for economics and markets at the Dutch lender Rabobank.\u201cEvery single time, it\u2019s \u2018oh, this time is the breakthrough. This time, the energy will flow.\u2019 And at any one given time, it could be right. But so far, repeatedly, it hasn\u2019t been.\u201d<\/p>\n
The head of the International Energy Agency, Fatih Birol, said last week that the world could hit a \u201cred zone\u201d in July and August by using far more oil than countries were producing, meaning further emergency measures may be required.<\/p>\n
Yet on Monday oil fell below $100 a barrel, reaching a one-month low of $95.95 as traders responded to weekend reports that a deal to end the war was close.<\/p>\n
That same day, Saudi Aramco, the state-controlled oil firm, predicted that if the strait of Hormuz remained closed for further weeks, \u201coil supply challenges\u201d would affect the market until next year.<\/p>\n
The shutdown of the channel, which allowed for the transport of about 20m barrels of oil a day before the crisis, has cut 14.4m barrels of oil a day from the Gulf\u2019s prewar output.<\/p>\n
Record draws from emergency oil stockpiles have helped to plug this shortfall by about 2m barrels a day but these releases are expected to end by July and inventories are already \u201ccritically low\u201d, according to the US investment bank JP Morgan.<\/p>\n
The bank said global oil demand fell by an average of 2.8m barrels a day in March and that deeper declines of 4.3m barrels a day in April and 5.5m barrels a day in May were likely. Despite the sharp cuts to demand, there remains a substantial shortfall in crude supplies to the market.<\/p>\n
\u201cThe market continues to watch for a US-Iran agreement to resume flows through the strait, but even in a blue-sky scenario, with flows normalising, the market will remain tight with inventories critically low,\u201d JP Morgan said.<\/p>\n
In Europe, gas reserves are also under pressure, HSBC said, with stores currently only 37% full, well below the five-year average of about 50% for this time of year. Injections of gas into storage facilities are also well below normal levels, in part because the market price is not reflecting the market\u2019s tight supplies.<\/p>\n
\u201cIn our view, this seems to reflect market complacency to some degree,\u201d HSBC said. \u201cThe consequence of this will likely result in accelerated storage injections during the back end of the summer months and with it heightened price volatility.\u201d<\/p>\n
Higher oil prices are already feeding through at the pumps. In the UK, petrol prices are at their highest level since the Middle East conflict started, the RAC said on Tuesday, with the average price now 159.43p, 26.6p more than on 28 February when the war began.<\/p>\n
On Wednesday, the cap on typical dual-fuel costs in Great Britain is forecast to increase by nearly 13% as a result of higher gas prices caused by the Hormuz blockade, which could cost the average household an extra \u00a3209 a year.<\/p>\n","protected":false},"excerpt":{"rendered":"
Oil rose back above $100 a barrel on Tuesday, after fresh US strikes on Iran dashed hopes of a Middle East breakthrough, with experts saying that whatever the outcome of peace talks, the global energy market may now be past the \u201cpoint of no return\u201d. News of the US attacks on missile launch sites and<\/p>\n","protected":false},"author":1,"featured_media":49764,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[1747,611,306,268,6558,1319,1007,21057],"class_list":{"0":"post-49763","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-barrel","9":"tag-energy","10":"tag-market","11":"tag-oil","12":"tag-point","13":"tag-price","14":"tag-return","15":"tag-touches"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/49763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=49763"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/49763\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/49764"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=49763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=49763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=49763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}