After a very tough week in eurozone politics with the economic crisis claiming the heads of two prime ministers, markets will likely pause a little before a resumption of attacks on whatever they perceive to be the weakest link.
But it will take only a small breath of optimism to push the price of oil from $99 into triple digits. This 15-week high for black oil might well be interpreted as another side of the market judgment on recent events: that things are not nearly so bad as they appear in some parts of the eurozone.
Money printing is having its impact on the commodities complex, although this is not the line that central banks wish to present. There are more dollars entering circulation and that is boosting the oil price as well as precious metals whose strength might still be expected in bad times.
At the same time the alleged Iranian nuclear bomb program is back in the news with Israel muttering about an attack seemingly without US support. Geopolitical uncertainty always adds a premium to oil prices and it is back again.
Yet the world is growing weary of armageddon scenarios or perhaps just learning to live with them. ArabianMoney’s editor is just back from a break in Spain and could only see evidence of a bouyant economy in Barcelona.
Of course if the eurozone fnancial crisis does break out of Greece, Ireland and Portgual then this is serious. But the prospect at the moment does seem to be a shallow recesssion in the European Union and for the US and China to continue recovery.
That said the queues outside the luxury shops in Hong Kong have gone for the first time in ages, though we still found Chinese shoppers in Barcelona last week buying up anything on special offer.
For the moment the excess cash in circulation is keeping the global economy afloat, and maybe it is the exaggeration of threats from smaller nations that keeps it that way. If this means that the can is being kicked down the road yet again then armageddon could still threaten at some future date.
High oil revenues in the meantime are a blessing for the Oil States of the Middle East and will continue.