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.
- 1 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 2 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 Free U2 album: How the most generous giveaway in music history turned PR disaster
- 5 Scotland could still declare independence – even without referendum, says Alex Salmond
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Tesco in crisis: UK managing director among four executives suspended after exposure of accounting scandal
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Alicia Keys leaks own nude photo 'to create a kinder and more peaceful world'
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...