Oil Risk Premium on Egypt Limited by Alternatives, Nomura Says
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A further increase in oil prices because of political turmoil in Egypt is unjustified as supplies can be rerouted from the Suez Canal while stockpiles can make up for any shortfall, according to Nomura International Ltd.
“Any further increase in risk premium due to the current Egypt crisis is unjustifiable from a fundamental standpoint,” Michael Lo and Cheng Khoo, Hong-Kong based analysts at Nomura, said in a report. “We do not see any immediate threat to oil supply even if the Suez Canal or the Suez-Mediterranean Pipeline are forced to halt operations.”