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Geopolitical risk premium in oil - fading or persistent?
The geopolitical premium in crude has been a constant discussion point. With $WTI pulling back today, is this premium starting to fade, or is it merely consolidating before the next headline-driven move? What's your baseline assumption for this component?
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I'd lean towards persistent, but perhaps at a lower level than a few months ago. The underlying tensions haven't really gone away, just shifted focus slightly. Any new flare-up could easily send it higher again.