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March 03, 2003
The price of oil
The Economist published an article last week entitled Bubbling up that presents a pretty gloomy outlook for the world economy.
The price of oil, at just under US$40 a barrel, is now almost double what it was a year ago. The uncertainty surrounding George Dubya's war with Iraq is a factor, but as The Economist points out, three other factors also come into in play: (i) the coldest winter in the northern hemisphere for yonks causing demand for oil to rise quite sharply; (ii) supply constraints outside of the Middle East (a lengthy strike in Venezuela has just concluded), and (iii) - wait for it - the big drop in US oil stocks - now at their lowest level for years. Now repeat after me ... "the Iraq conflict is not about oil".
Posted by jeremy at March 3, 2003 09:51 PM
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