Where Now After Oil’s Record Week?

To some extent, short term factors goaded oil higher last week, including the emerging crisis over Iranian nuclear ambitions and the possibility albeit remote of military intervention by Anglo-American forces, or surprise air strikes by Israel; and terrorist threats against Western embassies in Saudi Arabia that led to their closure.

But more significantly, longer term factors are at work. Most prominently, global oil production is simply close to its present limit. At root, like any market, the oil market and the oil price boils down to the interaction of supply and demand. Hence, today
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