After taking a long weekend away from the oil markets, investors jumped aboard the oil band wagon with a vengeance, pushing prices to the brink of $86 a barrel.
“The market was positive before but now it’s been confirmed,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. “If the job growth can be sustained for several months, we’ll definitely see crude demand pick up.”
Despite oil’s rapid ascension of late, there are those that point out recent history as a cause for concern. After all, the last time we saw oil approaching $100 a barrel, the global economy went into its worst period since the Great Depression and the rising cost of energy was deemed by many to be a contributing factor.
“The last time we had oil prices at current levels, what followed was the worse recession ever and we will worry about what the combination of what is still high unemployment and higher fuel expenditure does to the economic recovery,” said Olivier Jakob of Petromatrix in Switzerland. “On a fundamental basis we still do not see the indicators that would justify crude oil to trade at $90 a barrel.”
Source: Associated Press