Oil prices have gained 24 percent in the past two months and are now closing in on $87 barrel. This is the highest oil has been in a year and a half and there is little doubt that investors believe that the recently improved economic outlook in the countries that traditionally lead the way in energy use will lead to even higher demand.
However, some analysts are quick to point out that the latest run-up in prices is due more to speculation that actual demand.
“We think that the oil price increase is only of temporary nature, since it is driven by liquidity rather than by fundamental factors,” said a report on commodities from Commerzbank in Frankfurt. “The recent increase in correlation between oil prices and equity markets, which has now reached unprecedentedly high levels underscores our view.”
Source: Associate Press
