Silver Ridge Resources says it will take more than the end of Saudi airstrikes against rebels in Yemen to push oil prices down to recent lows.
According to Silver Ridge Resources, the tailwind that drove crude oil prices $10 higher this month has weakened after Saudi Arabia announced an end to its month-long airstrike campaign against Houthi rebels in Yemen who had taken over the country’s capital Saana and forced Yemeni president Abed Rabbo Mansour Hadi into exile.
During the campaign, oil prices had risen sharply as fears that a possible Yemeni civil war could potentially disrupt oil production in the region but the end to sorties brings hopes of a peaceful, political solution back into focus.
Vivian Ericsson, who leads commodities and resources research at Silver Ridge Resources said, “The end to airstrikes is welcome but while oil prices may pause here and consolidate, we think it’s going to take more to see a retest of the $40 level any time soon.”
Her comments coincided with suggestions elsewhere in the market that prices could rebound as investors turned to focus on rising demand and slowing output in the United States which has continued to see the number of operational oil rigs fall as producers mothball less efficient wells.
“Without a doubt, we’re seeing greater demand from places like South Africa and India and, while we don’t expect oil to return to the heady highs around $100, the $60-70 level looks as if it could be realistically supported by the dynamics of current supply and demand,” concluded Ericsson.
Silver Ridge Resources said its near-term price target for Brent light, sweet crude was $70 while it expected West Texas Intermediate to scale to $60.
About Silver Ridge Resources:
Founded in 2005, Silver Ridge Resources is an independent, full-service brokerage, investment planning and management concern committed to delivering innovative capital appreciation and preservation solutions to individuals and families with a high net worth. We place the welfare of our clients and their families first and we pride ourselves on having become the first port of call for their financial affairs. We consistently exceed our clients’ expectations by going the extra mile in terms of attention to detail, delivery of service and, most importantly, returns on investment.
From our headquarters in Shanghai, China and offices around the Asia Pacific region, we currently oversee the deployment of over $4.5 billion of assets on behalf of clients both in Asia and around the world.
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