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-- not one single barrel of oil has been affected by the exchange of fire between Israel and Hamas but that doesn't mean that energy markets are reacting.
Oil backing off today on hopes of the cease fire but only after climbing to fresh one month highs yesterday -- Kingston is -- global director of news.
And in a very welcome to the show thank you for coming back in a very basic sense you know people make the point that Israel does not produce oil -- -- -- eat what we're talking.
-- and then and there's no transportation.
Points I was asked yesterday what about the Suez Canal what -- -- does not gonna -- -- not gonna jeopardize all of its relations with the US by closing the -- cannot.
-- -- -- -- it's your very optimistic to think that this sort of instability in the neighborhood using going to spill over and I talked to people about this every damn I gotta tell you.
You're alone yeah -- didn't.
And the yeah yeah yes you can build a model that has this all the way going outsourcing Iran and -- closing the Strait of Hormuz but this would take real series of of reactions one after the other to imagine the of them the supply of oil being reduced as a result of this it's -- -- it's a very complex model to imagine that.
Do you think -- perhaps are not seeing a direct impact on the price of oil because of this in your view because we -- flash.
And supply of what I think the market is fundamentally very bearish right now I think in the fourth quarter.
But this year where you normally draw world -- -- -- crude you're gonna build world inventories of crude right now all the models into next initial build basically all -- long.
OPEC is gonna -- -- I think 23 weeks and Indiana and I think that it with the idea that this is going to be just a cakewalk meaning.
Does not necessarily true I think that some countries are gonna look out over next year and they're gonna see the possibility of a real sharp decline.
In the price of oil and I think that the US is having a big factor on that the USQ -- every estimate.
But what is producing is putting a lot of -- -- for the base price of oil that going into the new -- what's the average where does that -- well I think you know I mean right now we got about 85 dollar Brent and maybe not on achieving 85 dollar that we tonight about a 105 dollar -- Hmmm I wanna see what OPEC does that they come out and they do nothing.
And then these models show that essentially is going to be continue surplus all through next year.
I think that that's -- could put a significant bearish pushed the market's been held up a little bit by the fact the product markets are fairly tight.
But eventually that.
That works itself out because refining margins get so good you buy the crude you to.
I guess I totally disagree with you because there are a lot of people that -- the hand of Iran behind what's going on here in -- here talking about the steam in OPEC.
We're seeing Iran flex its muscle -- as well.
And I think that that kind of goes back to stability in the entire region and obviously you know there are major oil producer and they can really -- the whole I mean if you look at the map.
This is it feels like there's a new set of neighbors out there that that sort of the teams are lining up different that they had before -- -- was going to be a new -- It has significantly weakened Iranian exports are down by probably about a third the sanctions -- work to think far more.
Far better than anybody anticipated again largely because all this oil coming out of the US is given the western countries.
Room to maneuver that they wouldn't have had for five years ago I don't think these sanctions could have done so.
Iran has -- definitely -- member of OPEC right now we can actor remember the the Iraqis.
-- are not enemies anymore but the Iraqis attacking on about a 100000 barrels a day every single month.
To their production so that strengthen that hand so.
I don't think they go into the meaning or the market in general.
With a strong hand as they had previously John Kingston always great discussion thank you so much for coming now we appreciate it.
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