Oil market buffers should offer comfort amid geopolitical risks
Paul Hickin, director, EMEA oil news & analysis at Platts explains the importance of buffers and spare storage capacity in global oil markets amid geopolitical uncertainty.
Concerns over oil demand growth, stubborn stock levels and strong US supply have emboldened OPEC and its allies to keep cutting output. But the risk of miscalculation and significant disruption in the Middle East, sanctions on Venezuela and geopolitical uncertainties in countries such as Libya and Nigeria have raised the stakes for security of supply. OPEC's growing spare capacity in particular, along with strategic stocks, should provide an extra layer of comfort.