How High Will Oil Go?
After reaching record highs earlier this week of US$108 a barrel, analysts are wondering how high the oil price can go.
This uncertainty is compounded by the fact that OPEC has stated that it will not increase output because speculation is pressuring prices and the fundamentals haven’t changed.
Less than a decade ago the organisation was spouting that it would maintain oil around US$30 a barrel after coming off the lows in the early 90’s
We have seen the price triple that target over the past decade, and still they will not budge to increase output.
Could it be that the OPEC countries cannot increase output and they are already sailing hard into the wind?
Some analysts in the US have grave concerns about these figures, and even the International Energy Agency (IEA) has suggested higher prices were here to stay because of demand for oil from China and India.
Despite warnings from the IEA the OPEC president stated that output would not increase any time soon because the current record prices were artificially inflated.
