Oil prices under pressure: Here’s what you need to know

Oil prices under pressure: Here’s what you need to know

oil prices weaker this morning our uh next guest is pointing a higher for longer uh rate concern she’s also gearing up for a key OPEC meeting joining us now helim mof managing director and Global head of commodity strategy at RBC Capital markets uh I think that we haven’t seen you much hel Lima which is kind of uh indicative of what’s been going on in the oil patch hasn’t it I’ve been traveling as well Joe to the Middle East but no I mean oil is a pretty unspectacular story at the moment I mean we’re kind of range bound we have this morning the slide due to rate concerns but also we don’t have a shortage of oil on the market particularly light sweet barrels so there isn’t this anxiety that we are tight in the oil markets now we could see over summer European refineries coming out of Maintenance potentially 600,000 barrels of demand coming back some Port repairs in Guyana taking 200,000 of exports off the market but really right now we’re kind of stuck in this range and so we will be watching what happens in less than two weeks time at the OPEC meeting do they go in person do they do additional output action do they roll everything over I don’t think anyone’s anticipating at this current price level they’re going to be putting barrels back onto the market we haven’t get it the markets really haven’t given us any signals for either de the demand side or the supply side uh I don’t think hel or or things are really in equilibrium I mean we have a situation if you look at products you know diesel looks soft but gasoline looks relatively strong and so I just don’t think there’s a lot of conviction right now in the market what I will say is we’ve basically lost all the geopolitical risk premium that have been driving prices higher and after we had that Israel Iran exchange of fire I think a lot of people were saying I don’t need to worry about the Middle East anymore I mean the war continues but I’m not worried about geopolitically driven Supply disruptions and even over the weekend we had that helicopter crash the death of the Iranian president but there was no International Dimension to that so people see this all as a very local story right now for the Middle East with no real energy implications there have been some other parts of the Commodities complex that have been a little more uh interesting hel that’s why it’s hard to draw any macro conclusions from from what’s Happening uh in the oil patch well again I think what’s interesting about oil is is that again just the physical Market right now we are not in a supply deficit situation again certain barrels look you know in particularly abundant Supply so we’re not having the anxiety that we sometimes get going into summer but that said we still have summer driving season ahead of us and so we do see us in this Brent price range of you know 80 to 90 we think Brent’s going to average about $84 for the remainder of the Year WTI 7950 but we have to see what comes out of OPEC and we will be watching for any sort of geopolitical surprises on the horizon uh just in in passing you mentioned uh what what happened in U in Iran that hel Lima AIT like so many things um he was more I guess they characterize as a a logistics guy to sort of just uh you know follow orders and that nothing’s changed there but eventually something will change there um I something will change we’re going to have election on June 28th but importantly I mean he was a logistics guy but he was also seen as a leading Contender to be the next supreme leader and the supreme leader of Iran is basically Mr everything and so the question is right now are we looking at a situation where supreme leader essentially hands off to his son that might not be universally popular within Elite circles so could you have some Elite crack up in Iran we will have to wait and see what happens around these elections in June do you see the opposition come out in force obviously the economic situation in Iran remains pretty abysmal despite their oil exports so we will be watching what happens around the June elections and with succession going forward

Helima Croft, RBC Capital Markets global head of commodity strategy, joins ‘Squawk Box’ to discuss what’s going on in the oil sector, what signals the oil market has given investors, and much more.