Nils Pratley
Wednesday July 11, 2007
The last time oil was at $76 a barrel, which was only 11 months ago, a chorus line emerged to tell us it would not last. Speculative money was at play, political tensions would ease, and American drivers would notice a rise in pump prices. All were good points, and a reasonable explanation of why the oil price fell rapidly over the next few months; by January, Brent was close to $50 a barrel.
So why is it at $76 again? Certainly, speculative money is back. Oil, despite being a vast market with huge daily volumes, is also territory for financial players, who these days even include pension funds, who have been persuaded that modern investment portfolios need a smattering of commodities.