Falling Price of Oil Fuels Fears of Further Trouble Ahead
Scotland on Sunday › August 11, 2008
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Summary
NO NEWS has been more widely cheered by investors in troubled financial markets than the recent plunge in the price of oil. It has been greeted like the relief of a terrible and intensifying siege.
As the oil price has fallen back from its high of dollars 147 a barrel last month, bank shares have rallied. Like the gyrations of a giant barbell, one end (banks) rises as the other (oil) falls. Just a few weeks ago the barbell looked so violently unbalanced as to threaten the hapless victims under the end marked 'banks'. Indeed, without the retreat in oil, the slide in confidence across this sector might have been even more devastating than it proved in mid- July.See the full content of this document
Extract
Falling Price of Oil Fuels Fears of Further Trouble Ahead
Earlier this year investors bid up dollar-denominated oil futures as a hedge against a falling dollar and inflation. Any sign of a stronger greenback is often enough to give pause to a rally. The central banks' actions fed investor sentiment that economic growth is slowing in the developed world, cutting demand for crude.
So how much further and longer has the oil price to go?...See the full content of this document
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