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.”
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