OIL PRICES Up to no good

One fact appears clear: no-one really knows what’s happening

Oil prices are, in real terms, flirting with highs not seen since the Iranian revolution in 1979. A psychological three-digit target for a barrel of oil has been set after futures prices traded through the US$90/bbl mark on the New York Mercantile Exchange (Nymex) last week.

The International Energy Agency (IEA) says that, after adjusting for inflation, prices reached the equivalent of $101,70/bbl in April 1980 in the wake of the US embassy crisis in Tehran.


Barclays Capital says steep gains in price are the result of “a prolonged period of tightening oil market balances [in supply and demand]” and that the fundamentals in the market are “set to stay very supportive moving into the winter season”.

It says geopolitical tensions will continue to apply upward pressure on prices. So shall the “prolonged and continuing” deterioration of oil stocks.

Financial Mail (South Africa)