Despite abundant global supply, the price of oil has been climbing higher and higher for more than three months based on the risk that the Middle East would break out in greater unrest and production there would be severely limited. However, now that fuel prices are approaching 2008 levels, the greater risk may be that these high prices will destroy demand in the U.S. and Japan as those economies struggel with inflation and stagnating economic activity. Today, for the first time, analysts realized that higher prices may not be without consequences as both crude and products fell significantly.
Yesterday, WTI -$2.91, $109.88; Brent -$2.50, $124.15; RBOB -5.54¢, $3.2053; HO -6.23¢, $3.2574.
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