Wednesday, February 23, 2011
The events unfolding in Libya mark the first uprising in a major oil producing country this year, giving energy traders their first indication of where crude could climb if Mideast turmoil were to spread to Saudi Arabia or Iran.
“Pricing in Libya supply disruptions is one thing, but what if this social unrest spreads to Saudi Arabia, which holds 20 percent of the world’s oil?” said David Rosenberg, chief economist and strategist for Gluskin Sheff. “Do the math: we’d be talking about $200 oil.”
Without taking into account the collateral effects of such a strategic part of the Middle East falling under siege by its own people, a simple production comparison gets the price to at least $140 a barrel.
This article was posted: Wednesday, February 23, 2011 at 7:45 am