Oil: Up to $200 or Down to $25?

It is worrying for oil producers when the Russian President Dimitri Medvedev talks of $150 oil because it is so reminiscent of the $250 a barrel forecast last summer. A little hubris often comes before a fall.

Oil got down to $33 a barrel last December. Could another fall be on the cards this autumn?

Two things drive the oil market: speculation and fundamentals. It has been the speculators who have taken over the market since December and ramped oil prices back up despite the fundamentals of the worse recession since the Second World War.

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