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““There used to be the Greenspan put for the equity markets. I think there’s a Saudi put to the energy markets.””
Crude-oil prices could eclipse the $100 a barrel mark as markets reel from global supply shortages, says Mark Fisher, founder of MBF Clearing Corp., in an CBNC interview on Thursday.
Fisher’s interview with the business television network came on the same day that Russia said it was immediately placing a temporary ban on diesel and gasoline exports outside of a small group of former Soviet states.
The ban comes ahead of the winter heating season and follows Saudi Arabia this summer taking an additional 1 million barrels a day of crude oil off the market, which could even pressure U.S. gasoline prices, as MarketWatch’s William Watts explained in August.
The Saudi production output cut comes on top of previously agreed oil production cuts by the Organization of the Petroleum Exporting Countries and its Russia-led allies through the end of 2024.
As Saudi Arabia has reasserted itself by trying to exert more control over oil prices, Fischer said crude markets have begun to look more akin to the stock market under former Federal Reserve Chairman Alan Greenspan, when it appeared the Federal Reserve was ready to backstop equities on signs of weakness by cutting interest rates, the so-called “Greenspan put.”
“There used to be the Greenspan put to the equity markets. I think there’s a Saudi puts in the energy markets, to some degree,” Fischer said Thursday, adding that the floor could be around $75 top $80 a barrel.
Benchmark U.S. West Texas Intermediate Crude prices
CL00,
sank to a recent low of $68.56 a barrel in May on concerns about slowing global economic growth after central banks in many major developed economies jacked up interest rates to tame soaring inflation. Global oil prices quickly rebounded this summer in the wake of the announced productions cuts.
WTI for November delivery
CLX23,
was up 0.3% on Thursday after the Russia ban to trade at $89.97 a barrel, according to FactSet. Brent crude
BRN00,
BRNX23,
the global benchmark, was up 0.1% to $93.66 a barrel.
Higher oil prices in the U.S. have fed into inflation data this summer and is a factor that Fed Chairman Jerome Powell said on Wednesday that the central bank is monitoring.
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