Strongest effect on the price of oil

desjti · Guest

What do you believe is the strongest effect on the price of oil.
The biggest two for me are the geopolitical crisis in the Middle East and also the increase of demand for Oil in China.

backstop · Posted: Fri Nov 12, 2004 9:02 am Post subject:

Destji - I'd agree with you over the cut in Iraqi output due to the US-led invasion and the general destabilization of the ME as a major factor pushing prices up.

I'd differ with you on China, on the grounds that US growth of oil usage is as large or larger than China's, and of course in on a massively greater base.

A third factor is the continuing loss of GOM supplies from hurricane Ivan, which were 30% and have only slowly been recovering.

The underlying issue, without which none of the above would affect prices, is that we're running out of sufficient accessible oil to maintain economic growth.

regards,

Backstop