WORLD WATCH Opec's savvy market micromanagement, supply disruptions in Venezuela and Nigeria, and Iraq's slow postwar recovery have all been credited for pushing the Opec basket price above $28/bbl, the upper limit of the target price band, for much of 2003. Market psychology also played a vital role. Ahead of the Iraq invasion, the received wisdom was that prices were being inflated by a "war premium," and that once the conflict got under way, they would spike before crashing to more normal levels, as happened in the 1991 Gulf War. But prices did not fall, suggesting that the "war" premium" was in fact a "political risk" premium, reflecting broader concerns about stability in the Middle East, the world's biggest oil-producing region, and the spread of terrorism in the post-9/11 world. Recent warnings of more terror attacks in Saudi Arabia, continued clashes between Israelis and Palestinians, further violence in Iraq, and the heightened terror alert in the US suggest that, whatever else happens, the political risk premium will be equally crucial in 2004. Jane Collin in London
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From Energyintel.com
Lady, you can call it whatever the hell you want, just as long as WTI prices continue to start with a 3! <g> |
