(The Economist) - Oil prices have recently been above $40 a barrel. A soaring world economy has sucked global oil inventories dry. Nearly every OPEC producer, save Saudi Arabia, is already producing about as much oil as it can. Oil traders report that fears of terrorist attacks that might disrupt Middle-Eastern oil exports may account for as much as $8 of the current per-barrel price. Soaring oil demand, private-sector destocking, and lack of investment in new production capacity by OPEC has left the world with an extraordinarily tight oil market today. Building a new surplus will inevitably take a long time. Until then, the potential instability of Saudi Arabia's oil supply will remain a strategic weakness for the world economy.
2004-05-28 00:00:00Full ArticleBACK Visit the Daily Alert Archive