For bulls and bears with long memories, the oil market may seem a lot like 1991.
Nearly three decades ago, U.S. forces had just launched the “Desert Storm” operation to liberate Kuwait from Iraq, and oil tankers navigating the region were fearful of retaliatory attacks from Saddam Hussein’s forces. At the same time, the global economy was slowing down and U.S. crude inventories were starting to pile up.
The situation in the Middle East today feels like a deja vu.
As in the Gulf War, oil tankers are at risk, with two attacked in the Gulf of Oman on Thursday. But slowing economic growth -- combined with rising U.S. shale production -- is swelling stockpiles. According to the U.S. Energy Information Administration, American crude inventories jumped last month by 15.7 million barrels -- the largest monthly increase for any May since precisely 1991.
Read the full article and more in Bloomberg.