With prices reaching $109 a barrel, here a few of the causes:
An Al-Qaeda rocket attack on Oil Experts’ homes in Yemen
A severe fire at Neste’s Porvoo refinery in Finland
OPEC’s refusal to increase supplies despite their first decline in output since August.
An overdue rally in the price of gold, silver, platinum and other precious metals
The ever present weak dollar
And of course Friday’s unemployment data, unstable equities and record high prices of rice and other commodities as mentioned in the previous post. With such a mix of fundamental and non fundamental causes it’s hard to predict a peak but it should come as little surprise if $110 is reached.
This much pressure in the system can only be relieved by an increase by OPEC, a rally in the dollar or significant reserve developments from one of the major producers. None of these look likely, but fears of overheating and relatively stable supplies from Europe should stop the price from spiralling too high.
