Friday, December 18, 2009

Oil price: where next?

Since February, the oil price has made a strong recovery to around $80, retracing about half of the losses of last winter. All of this activity can be explained by inelastic demand interacting with inelastic supply, albeit that OPEC spare capacity may be switched on and off at the will of OPEC countries, mainly Saudi Arabia.

So how can this help predict what the future might hold?

Read more.