Oil Underperforms Historical Shocks Despite 14% Supply Loss – SocGen
Societe Generale analysts say oil prices have underperformed relative to past supply disruptions, even as global crude supply has dropped by 14%, suggesting a tighter market balance that is not fully reflected in the current muted price spike.
Oil prices have failed to rally as sharply as they have during comparable historical supply shocks, according to Societe Generale analysts Michael Haigh and Jeremy Sellem. They point to a 14% reduction in global crude output as evidence that the underlying supply-demand balance has tightened significantly.
The muted price response masks what the analysts describe as a tighter balance, implying that current valuations may not fully account for the supply loss. The bank's view suggests that further upside could be justified if the supply disruption persists or deepens.
Source: FXStreet Forex News