Peter speaks with NDTV Profit anchor Divya Wadhwa
Risk Warning: Our services involve a significant risk and can result in the loss of your invested capital. *T&Cs apply.
Please consider our Risk Disclosure: https://www.xm.com/goto/risk/en
Risk warning is correct at the time of publication and may change. Please check our Risk Disclosure for an up to date risk warning
Receive your daily market and forex news analysis directly from experienced forex and market news analysts! Tune in here to stay updated on a daily basis: https://www.xm.com/weekly-forex-review-and-outlook
In-depth forex news analysis on all major currencies, such as EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD.
Global Market Insights - Forex, Futures, Stocks
XM.COM - Peter McGuire - NDTV
Peter speaks with NDTV Profit anchor Divya WadhwaRisk Warning: Our services involve a significant risk and can result in the loss of your invested capital. *T&Cs apply.Please consider our Risk Disclosure: https://www.xm.com/goto/risk/enRisk warning is correct at the time of publication and may change. Please check our Risk Disclosure for an up to date risk warningReceive your daily market and forex news analysis directly from experienced forex and market news analysts! Tune in here to sta...
- Broadcast on:
- 07 Oct 2024
- Audio Format:
- other
And to get more on this, we have Peter McGuire, the CEO of ZM.com, oil expert Sydney joining us. Thank you so much, sir, for speaking with us here. As far as the escalating tension between Iran and Israel, that's really driving up the prices of oil. We're seeing a 5% surge in oil prices and the fears are that the ongoing military action could easily take the prices of Brent Oil, which is nearly $78 a barrel to almost $100 a barrel. Well, Divi, yes, I mean, there are many components to this and good morning. I mean, you know, when you're thinking about the big picture and you've got Iran, certainly with Israel, and the possibility of a strike on Iran's oil infrastructure, and then President Biden saying out, saying that he could assist in some fashion or be a party to it, then that is really going to change the footprint, I think, of that whole situation. We've had a big push-up as far as price, and the war premium was certainly starting to be built in. Oil prices could certainly spike significantly from here. Also, you know, important oil-shipping rules, such as Red Sea and the Strait of Hormuz, can be disrupted by further escalation. Now, two-thirds of the oil and half the LNG that India imports comes from this particular region. Absolutely right. I mean, that's the choke point as far as the Strait of Hormuz. It just sits off, you know, off of Dubai. And the issue, quite simply, is if you were to interrupt or have a change as far as shipping, then that's really going to put a handbrake as far as how the world plays from a demand side and from a supply side. This really changes so much in the sense of getting production out there. But as you said, as far as India's concern, many countries are reliant on energy. And then the next part, of course, is the whole, how long is the timescale of this to work through the market? Is this going to be a very short-lived situation, or is it going to magnify over the weeks ahead? Right. India, you know, significantly depends on oil and gas imports from the Middle East, despite its supplies from Russia. And you know, when we talk about higher prices, that would mean inflation as well as it would impact the economic growth. How are you seeing this play forward when it comes to the rise that we're seeing in oil petroleum as well as its products? Well, you know, you're up 8% this week or just about, and we've got Friday to go as far as New York tonight and how Brent gets traded. So there's the first part. So you could be up 10% by this time to borrow. Now, the impact naturally is, where does the market see itself? What happens as far as your political strikes and as far as production, and you know, if you dismantle that, then that really changes that oil supply that Iran has to add to their daily quota. And you know, a small strike could, you know, take three to 450,000 barrels out of the market. If it was a major strike, it could be up to one and a half to two million barrels a day of Iranian production. Well, that's right, Peter. This is Sakshi from the NDTV studios. Well, staying with supply concerns, you know, this entire conflict deepening could potentially derail global supplies across the region as well as globally for India as well. What do you see as the impact in the near term? Well, yes. I mean, you can't discount that to every possibility could play out. And this is a major concern, you know, we've got to look at the fabric as far as the Middle East, round about 35, 36% of global supply comes through the Middle East. The inflation story would only, you know, exacerbate and, you know, ramp up very, very quickly if you had, you know, crude prices at 80, 90, $100 plus a barrel. So all of this needs to be taken into context. And it's just a wait and see game at the moment where, whether we're going to see retaliatory action from Israel and possibly the United States on that Iranian infrastructure. Right. You say it's a wait and watch mode, of course, but yesterday we saw Brent crude prices touching nearly $75 a barrel. Just today we are seeing a significant jump and they're likely to touch $78 a barrel. Anticipation of these rates going even higher. So Brent crude, which is significant to India at large, what is your outlook for Brent crude prices in the near term? Well, you've got to say that momentum that we've seen has been very aggressive. So, you know, $2.53 over a day is an unusual and you could well be at $80 by the end of trade today. You know, when New York closes, so there's every possibility. If you see a strike over the weekend, crude prices could jump $10, $15 from these numbers at the moment. It's not fair talking, that's geopolitical war premium that's built into price. I've been following these markets for the past part of 40 years and this is a major concern at the moment. This is as heavy as I've seen when you've got the United States involved in this. Right. Thank you so much, Peter McGuire for joining us all the way from Sydney and thank you so much, actually, for all those details.