Different Opinion

Fair and balanced comments about the world from the everyday perspective of a welfare-state citizen.

20041011
 

Demand Driven Oil Squeeze

Today, oil prices continued their climb and, as WSJ (subsription) writes, "Benchmark light, sweet crude futures for November settled at a new record of $53.64 a barrel, up 33 cents on the New York Mercantile Exchange". For an analysis of this development, I have been reading Barry Ritholz's highly interesting posts on the subject and have from my much more limited perspective quite naturally very little to add. Except of course that the futures and swaps market for crude still points to only a slow decrease in prices, and the chart below that underlines what Barry says about the oil price increase being driven primarily by increased demand from China. Crude oil prices in red, Chinese net imports in white, all from the Bloomberg system.





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