News

January 09, 2009

The Conflict In Gaza And Ukraine/Russia Tensions Ensure Oil Price Volatility Will Continue Into 2009

By Eithne Treanor

The volatility we’ve seen in the oil price looks set to continue in 2009. With more than 50 per cent wiped off the price of oil in one year, geopolitical issues and a worsening economy continued to impact the oil price in the closing days of the year. Stockpiles are still adequate and the market is bracing itself for more gloom on the trading floor for the coming month. The trading price on Friday was above US$42.

On the last day of the year, oil prices got a temporary boost beyond US$44 as the conflict in Gaza escalated. Israel continued to fire rockets into the region and there was concern that Middle Eastern supplies of oil may be disrupted. The conflict still continues with both sides blaming each other and hundreds of dead civilians caught in the cross-fire. The 14 percent rally was short-lived but such conflict indicates the volatility still evident in the market. Gas supply problems between Russia...