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Why has the price of oil retraced recently?

*Financial Times, by Javier Blas & Carola Hoyos, September 2, 2008

“Oil prices sank to a five-month low of just over $105 a barrel on Tuesday as traders turned their sights on signs that slower growth was spreading beyond the US into Europe, Japan and even emerging markets.

The fall led some analysts to suggest that oil prices could move back below $100 a barrel, a level not seen since March, after fears that US oil supplies could be severely disrupted by hurricane Gustav proved unfounded.

‘With the fear of Gustav now gone, a downside ‘speed bump’ will have effectively been removed as far as crude oil prices are concerned, and we expect values to start tracking lower once again,’ said Edward Meir, of MF Global in New York.

The slide in oil prices could be short-lived in the light of Iran stepping up efforts to persuade fellow Opec members to cut output when they meet in Vienna next week.”


*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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