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Last week well all the violence in the Middle East and certainly -- concern about rising oil prices Libya epicenter of the unrest is home to Africa's largest oil reserves in the course plays a key role in global supply.
Our next guest Mizuho securities energy's future as direct -- -- joins us now Bob.
How concerned are you what's with what's going on in the Middle East and the likelihood that.
Oil supply could be disrupted.
Well we have a couple problems moving -- once in the Middle East first of all there's the recent unrest that led to the -- -- of the Libyan ambassador the United States ambassador to Libya last week.
I'm not imply that there could be some kind of falling way the situation in Libya Libya is a big producer.
Obviously -- production was taken off the market and no -- Qaddafi but has come back on board rather quickly.
At the same time you have -- any situation where there's a lot of barrels taken off the market already -- a function of the sanctions.
The United States.
Armed forces along with I think -- way to other countries are maneuvering -- -- Strait of Hormuz -- now.
In a mine sweeping operation.
So those barrels -- are gonna take it off the market the market -- really not afford to take many more barrels off the market.
So the unrest threatens the -- provide additional barrels at a very crucial time.
But the but the price movement hasn't been fact.
Hi to the upside -- -- why is that -- that psychological hundred dollars a barrel a level.
Do we push -- that anytime soon maybe this week.
Well everywhere throughout last week but there's a lot of -- -- is going on here he had unrest last week.
You have got -- I Iranian situation that's been cooking for quite some -- some time some you have the QE3 situation that it weakens the dollar bids commodities in general.
And on a technical level of the crude oil market trade did the 200 day moving average last week you know that's a very strong technical level that people haven't -- looking -- It's it's it's of -- the strong technical level for all commodities all.
But actually traded instruments so where do you see oil going now I understand it -- a lot depends on what's going on in the Middle East and what happens next but you know what do you think based on the fundamentals of the market right now -- you think oil will go.
Why do like it through a hundred dollars I see it going through hundred dollars that may be at the 105107.
Is a number -- a lot of people been talking about we have a view that wave -- -- currency that for the last year.
Out of that area and so I think we convinced we can get very what we're thinking we're forgetting about though there was a lot of recent talk about the strategic petroleum reserve off -- -- -- the higher we got out.
The more I feel that we'll hear talk along those lines.
Now there's also drag race to the -- and it's harder and harder for political reasons I think the pull the trigger on that's PR relays.
As we get closer to the election will be a lot of accusations about being a political instrument you know so there's that the company played also -- But it we CBS situation Middle East settle old died down a little bit then you could see to refocus on what is still fairly weak global economies ago we see a big sell off in oil.
Well they're -- It is definitely lagging low but there are just so many moving pieces -- now you know even.
You even have to keep a good consideration the average rallies days is so much more expensive to bring to the market that a had been the past we have a lot of even in this country we have.
A lot of crude oil that we have Bob managed to bring to the surface but it cost a lot more money than it used to so that's also it added.
Pressure on the other -- cost of but bringing.
Crude oil to surface that's very good point were Rudy at a time thank you so much Bob yoga energy futures director of Mizuho securities we appreciate it thank you.
-- isn't breaking.
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