March 22, 2011 2:40 PM EDT
Currently, crude oil prices are trading around $105 per barrel. Eugen Weinberg of Commerzbank estimates that $20 to $25 of it reflect fears of unrest in the Middle East; based on supply and demand fundamentals alone, oil prices would be closer to $80 to $90 per barrel.
Weinberg made the comments during a Bloomberg TV interview.
He expects the fears – and oil prices – to ease in the coming months.
He said the oil installments in Libya weren’t significantly damaged and the country should resume production in a few months. In the meantime, Saudi Arabia, which has significant spare capacity, will pick up the slack, according to Weinberg.
On Tuesday, oil prices surged as tensions escalated in Yemen; the fear is that the unrest and disruptions will spread to neighboring Saudi Arabia.
Follow us
Weinberg, however, thinks Saudi Arabia will be fine and that oil prices will therefore fall soon.
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
We value your privacy. Your email address will not be shared.
