Supply fears exaggerated

Published on 25 February 2011

Benchmark light crude prices excluding WTI have trended higher of late driven by the revolutionary atmosphere in North Africa and the Middle East. While the risk of a major supply interruption has clearly increased in recent weeks, we believe such an event would be short-lived. Near-term, Brent could easily exceed $120/barrel but a softening trend or even a ‘death spiral’ is looking increasingly likely once the revolutionary fervour in the Middle East is satiated.

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