07 January 2011

The price of oil is about to exceed US$100 a barrel but, remarkably, there is little nervousness in major consuming nations. Traders ascribe this to adequate inventory built up when crude was cheap, prior to the spike which began around mid-year. China, whose demand moves markets, had been stocking up and it has the added security of long-term investment and supply contracts with producers not only in the Middle East, but also in Africa and South America. Much of its own oil and gas reserves is kept for contingencies.