HSBC Flags a Super-Squeeze In the Oil Market

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HSBC analysts warn of a 'super-squeeze' in the oil market due to the Middle East crisis and closure of the Strait of Hormuz, potentially causing sharp price spikes. The disruption has led to physical supply shortages rather than a super-cycle increase.

The Middle East crisis and the still closed Strait of Hormuz have created a “super-squeeze” in oil markets, which could lead to sharp price spikes, analysts at HSBC say. Prices have rallied in recent months not because of some “super-cycle” but because of the massive supply disruption and an actual squeeze in physical supply, the UK-based bank said in a note carried by Bloomberg. “The longer the strait is closed, the more inventories are run down, the more likely it is that we reach ‘tipping points’ in…