You are here: Home - Household Bills - News -

Fundamentals driving oil price higher

0
Written by:
02/07/2008

Alliance Trust claims fundamentals rather than speculation are driving oil prices higher.

Angus McPhail, global oil and natural resources analyst at Alliance Trust, said: “Fundamentals rather than speculation are driving oil prices higher. Oil markets remain tightly controlled by supply and demand. China is increasingly leading demand from non-Organisation for Economic Co-operation and Development members (OECD), which is currently more than offsetting weakening demand from the US and other OECD countries.

“On the supply side, production from non-Organisation of the Petroleum Exporting Countries (OPEC) is going through a period of sustained weakness with Russia being one of the largest casualties, which is now registering significant production declines.

“Overall, OPEC production has risen with some additional production being brought on by the Saudis. However, most of these barrels are of heavier crude quality and have lower values attached to them and are therefore less likely to make a meaningful impact on the current oil prices.

“Crude oil stocks remain low on a global level, particularly in the US, where they stand at well below the five-year average. We believe it is very likely that we will have to face even higher oil prices than the ones we are currently seeing.

“Rising geopolitical risk, hurricane risk, and rising industry cost inflation are all factors which could push prices to new highs over the next three months. Commodities excluding oil have risen considerably in the past year and although some speculative money has moved into precious metals we do not think that the evidence points towards a significant speculative bubble emerging in oil prices.”

Related Posts

Tagged:

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Are you married or in a relationship and still living at home with your parents? According to latest research as ma… https://t.co/SpiNzsKIi6
  • RT @TSB_News: Today we’ve launched market leading rates on the high street with our two-year fixed bond and two-year fixed rate cash ISA. R…
  • RT @TSB_News: Today we’ve launched market leading rates on the high street with our two-year fixed bond and two-year fixed rate cash ISA. R…

Read previous post:
Financial stability framework published

Proposals for strengthening the framework for financial stability and protecting depositors have been published by HM Treasury, the Financial Services...

Close