Off the Charts: Time to really worry about oil

Oil is on the move again, but that fact is getting less attention than it did last summer, when the nearby futures price climbed to almost $70 a barrel, amid concern over the impact of Hurricane Katrina.

But this move may be more important, even though the price now is around $67, well below the summer peak, because it reflects a market that is getting more and more worried about the future.
…One reason for the current rise may also be transitory: fear of what is going to happen in Iran if it does not curtail its nuclear program. The United States and European powers may be headed for sanctions, and Iran might respond with a withdrawal of oil supply. The fact that the impact is being felt in prices more than a year off shows that there is no confidence the problem will be solved anytime soon.

“First the cash market went up, reflecting the reality of a very tight supply-demand situation,” said Robert Barbera, chief economist of Investment Technology Group, a trading concern. “Then the futures went up, making the case this was an enduring change in energy prices.”

International Herald Tribune