Abu Dhabi: The economic backdrop for the oil market is the most healthy it has been in a long time, according to the group chief executive of London-headquartered bank HSBC.
Asked for his outlook for the price of oil, John Flint said: “The global economy is in good shape. We’ve got synchronised growth. We’ve got low inflation. We’ve got monetary policy being normalised. It’s the healthiest economy backdrop we’ve seen for a long time.”
Flint has been group CEO of HSBC, one of the largest banks and financial institutions in the world, since February.
Speaking to Gulf News on the sidelines of the Adnoc Downstream Investment Forum on Sunday in Abu Dhabi, Flint said that these positive economic indicators boded well for the demand of oil.
“From an economic perspective... as a general comment, that’ll all go well for demand,” Flint said.
He declined to comment on supply side, saying it was too technical, but added that from the demand side, “things look good.”
On the issue of geopolitical risk affecting the price of oil, Flint conceded that risk was simply a part of doing business in the region.
The Middle East has seen a rise in tensions over the past year, with several ongoing conflicts and political crises.
“There’s always geopolitical risk, especially in this region, but we don’t see it pushing the price of oil up,” Flint said.
“This is a remarkably resilient region,” he added.
Brent crude surpassed $77 (Dh282.82) a barrel last week after Washington withdrew from an international nuclear deal with Iran, threatening to push an already tight market in to undersupply.
Globally, demand has been growing, especially in Asia. Some analysts predict that oil prices will rise to $80-$100 per barrel later this year, as US sanctions begin to bite and Iran’s exports start sinking.
However, prices rose again on statements from European leaders in support of the Iran nuclear agreement, which could see the country’s crude exports stay on global markets.
