Oil’s not well with the world

AS the finance ministers and central bank governors of the G-7 sat down to dinner in Washington on Friday night, meeting for the first time with their Chinese counterparts, the price of oil had just closed at its highest ever level, $US50.12 a barrel.

‘Oil prices remain high and are a risk,’ said a G-7 official. There was now ‘a recognition that oil was scarcer than was thought a few years ago’. These are ominous words for a G-7 official.

They even tend to corroborate the ‘alarmist’ view that the world is running out of oil and that high prices are here to stay — a structural phenomenon rather than a spike.

The Austrailian