SEB sees oil price rising
Oil is likely to rise through today, Monday 28 February, according to oil market technical analysis from Swedish bank SEB
Bjarne Schieldrop, SEB’s chief analyst commodities, said there were no reasons why the ongoing revolt against the Gaddafi kleptocracy should come to an end. Together with confirmation from the International Energy Agency that total loss of supply from Libya is 1.2mb/d out of total normal daily production of 1.6mb/d, and an outbreak of unrest reported from yet another Middle Eastern country Oman, this speaks for further rises in the oil price from Friday’s Brent close of $112.14.
“The rebels are gaining ground in Libya. In addition to its stronghold of the eastern part of Libya, they are now also reported to hold the control in the cities Misurata and Zawiya in the west, where the latter is only 55km away from Tripoli,” Schieldrop said.
“The speed and intensity of the uprising is reflecting a population sick of a shameless, brutal and kleptocratic regime, leaving little of its oil wealth to the general population. In a bid to hold on to his power, Gaddafi started to hand out 500 dinars in cash handouts to every family in Libya. It is unlikely that this will have much impact on holding back the rage against the Gaddafi regime and it increasingly looks like Gaddafi’s days as head of Libya is coming to an end.”
Schieldrop added: “There is little reason to believe that the current drive for political reform across the Middle East and North Africa by a young and impatient population who want their voices to be heard is going to end any time soon. We thus view that the risk in the oil price continues to be skewed to the upside and hold a bullish view for the day ahead.”