Oil prices: is there a spike on the horizon?

So, have the past 12 months been a blip in the relentless charge ahead or were speculators the cause of an unsustainable boom?

The implosion of the global economy cut energy demand to such an extent that tankers were being used to store oil offshore in the hope prices would rise in the future. Offshore storage peaked in April, when 100m barrels were being stored aboard ships. However, since the oil price has started to recover, this oil is gradually being brought onshore.

One year ago this Saturday, oil jumped to $147 a barrel as demand from Asia surged and concerns about future production gathered pace. There had been a historical lack of investment in finding new sources of oil and concerns about a supply squeeze were very real. A weakening dollar also added to the upside. Commodities, which are priced in dollars, act as a hedge against losses from a falling US currency. This means much of the gains were put down to “speculation”.

However, senior industry figures have strongly denied that speculation was the main cause of the spike