Another hike in oil prices is not out of the question, with some experts believing that a temporary spike is a distinct probability, reported Reuters.
The wild cards in the equation are how hard winter will hit Europe and the United States, both of which are believed to be running low on heating oil stocks, and whether an anticipated gap in Iraqi export loadings in December lasts more than a few days.
Iraq is scheduled to renegotiate its oil-for-food arrangement at the United Nations in December, and it is thought that it might press to have sanctions lifted completely.
In a recent report, Deutsche Bank suggested that both the Iraqi and cold weather scenarios would lift the markets on their own. But both events happening at once would send prices hurtling higher.
According to Reuters, the International Energy Agency (IEA) has estimated that extreme weather scenarios are enough to swing heating fuel demand up or down by as much as 500,000 barrels per day. And if one adds to that a disruption of supply from one or more major refineries, all at a time of high political tension in the Middle East, then say the experts that prices could go as high as $40 a barrel and more.
Other factors which could drive prices upward include civil strife in Nigeria and political instability in Indonesia.
So far, Reuters stated, the Western economies appear to lived through the 2000 oil price rise without incurring too much damage, but that might change if a price of $40 a barrel is reached. -- (Albawaba-MEBG)
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