Credit crisis was crude compared with this oil price surge

Now you see it. For most of the last year, the world has been living through an invisible crisis. The ravaging of the banking system, painful though it has been for shareholders in the grandes dames of Wall Street and banks beyond, has had relatively little conspicuous impact on the lives of the average Joe.

The principal exception to that rule has been the dearth of credit available to British homebuyers: a serious issue, to be sure, and one which because of the dithering of our Government has had draconian consequences. I would hazard a guess, though, that once the credit crisis is fading to black, the reality of $135 oil will make today’s trauma feel like a minor inconvenience.


Where the banking meltdown has largely been confined to the paper-based hinterlands of structured debt products and banking writedowns, the ongoing surge in the oil price is very much a real-economy issue.

Whether you subscribe to the view that the world has sufficient oil for another 50 or 200 years is immaterial. Amid surging demand from emerging economies – and undoubtedly an element of the froth that speculation has brought to the party – there is little reason to suspect that crude prices are going to experience a serious correction anytime soon.

Telegraph