Outlook: Oil price hike
Saturday 31 July 1999
What will probably stay their hand, at least for a while longer, are the continuing high levels of crude oil inventories. Until there is a substantial drawdown on these inventories, any rise in output would be suicidal for the oil price, the producers and their economies.
For those who consume oil rather than produce it - which is most of the world - a low oil price is, of course, no bad thing. The three-day week which followed the oil shock of 1973, and the mini recession which followed the Gulf War show just how destructive high oil prices can be.
By contrast, a low oil price helps subdue inflation, stimulates growth and keeps down the cost of motoring. And although the short-term impact on the oil companies may be painful, it teaches them to find more efficient ways of extracting the stuff and running their businesses. Without the becalmed oil price of the last 12 months, it is debatable whether the world would have seen quite the same level of opportunistic mergers within the oil industry.
On the other side of the ledger, low oil prices wreak havoc with the economies of the producing countries, and when those producers are also emerging economies such as Russia, that can spell trouble. Six months ago, when the oil price was languishing at under $10 a barrel, no-one would have dared guess it could rise to today's levels. There again, commodity prices are up right across the board. It wouldn't pay to bet on them staying there. The recovery is a fragile one, and if the US goes into a tailspin, they'll go straight back down again.
- 2 Why this father didn’t hide his daughter’s heroin overdose in her obituary
- 3 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 The most powerful passports in the world
Nepal earthquake in pictures: Photos show devastation caused by 7.8 magnitude earthquake
Smartphones are making children borderline autistic, says psychiatrist
Nepal earthquake: The race is on to help thousands trapped under rubble around Kathmandu, while remote villages face a long wait for help
Royal baby: Live updates as superbug closes ward at St Mary's Hospital where Duchess of Cambridge is due to give birth
Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...