Conflict in the Middle East has sent crude oil soaring in recent days.
From $US60 a barrel in May, some analysts have predicted oil could soar past the $US100 a barrel mark if the conflict between Israel and Iran spirals, with strikes on oil infrastructure and disruption to supply chains.
That would have a widespread impact on Australian prices, given oil flows through to input costs, either directly via production or indirectly via distribution, for pretty much the entire economy.
The price of crude oil has soared in recent days due to the escalating conflict in the Middle East.Credit: Justin McManus
But ANZ commodities analysts Daniel Hynes and Soni Kumari think the $US100 a barrel scenario is unlikely.
The most likely outcome (they assign about a 50 per cent chance) is for crude prices to reach $US75-85 a barrel, despite an extended conflict.
“This would see supplies come under direct threat,” the analysts said.
“However, the oil market is better equipped to respond to that than it has been in the past.
“[Oil exporting organisation] OPEC has over six million barrels per day of spare capacity that can be quickly activated.”
AAP
Read the full article here
