Wednesday, 23 February 2011
Oil price fear mongering
Personally, I think oil prices will stabilise as soon as political unrest subsides in the Middle East. The recent spike in prices is just a rather largish blip on a well established long run trend increase in prices.
Nevertheless, there is a lot of alarmist scaremongering out there for those who like a pessimistic tinge to their daily news stories.
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As long as no-one blows up any oil infrastructure, then your probably right.
Unlike Egypt, Libya is using extreme force to stop the unrest, which could push the protesters into more extreme actions.
Also Libya is a net oil exporter, so any long term cut in production will have profound impacts on the price of oil as OPEC does not have that much spare capacity. Egypt is a net oil importer so if Egyptian production was cut, their consumption would drop accordingly with little long term impact on oil prices.
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