Oil Prices Continue To Rise
By Stewart Douglas
September 28, 2007
Oil prices in Asian markets have closed at a new record high through trade today, as a result of the ongoing weakness of the dollar and the perpetual supply fears that have propped up prices for the best part of this year.
Through trading in Asia today the price of oil per barrel broke the landmark $83 point, up at just below $84 to close at a new record high, as markets continue to demand beyond the realms of current supply, prior to November’s planned supply increase.
The recent heavy devaluation of the dollar on world currency exchanges has resulted in oil prices soaring, reflecting the fact that the dollar is now worth less than before internationally as a result of its poor economic performance of late.
Unfortunately for the global economic climate, the ongoing upwards price pressure on crude oil looks set to continue to have an adverse effect on economic growth and inflation, as an essential component in manufacturing processes and fuel which will inevitably lead to consumer price inflation.
OPEC, the cartel of nations responsible for 40% of the global crude oil output, has pledged to step up supply by an extra 500,000 barrels a day as of November this year, in an attempt to ease the current supply shortage and strong vertical price pressures.
However, many analysts are fearing that strongly growing demand from Eastern markets and periodic output problems over the last few months will see oil prices continue to rise, even after output does increase initially.
And with severe weather patterns across major output channels predicted over the coming months, as well as political problems within Nigeria including abductions and shootings in recent days, the problems for crude oil look set to continue over the immediate future, with experts predicting it could rise as high as $85 a barrel before too long.