« Ben Bernanke to Chair CEA | Main | Polluting the Information Stream »

April 04, 2005


It's been a while since I envied Alan Greenspan and his successors. But it's looking like the life of a central banker is going to be even more exciting than I had imagined:

FT.com / Markets / Commodities - Crude oil prices surge past $58: By Peter Garnham:

The price of oil has moved more than $3 a barrel higher since last Thursday when investment bank Goldman Sachs released a report saying oil prices might have entered a ‘super-spike’ period that could drive them towards $105 a barrel as demand outstrips capacity. Adding to concerns were reports that the International Energy Agency is preparing a warning this month that oil-importing countries should implement emergency oil-saving policies if supplies fall by as little as 1m-2m barrels a day. This was much lower than the 6m b/d agreed in the treaty that founded the energy watchdog back in the 1970s.

Nymex WTI for May delivery, the benchmark US crude, hit $58.28 a barrel on Monday.... Nymex WTI for September, trading at a premium to the front month, hit $60.03, the first time a futures contract has passed $60 a barrel....

Opec on Monday sought to calm fears over oil supplies. Sheikh al-Fahd al-Sabah, Kuwaiti oil minister and Opec president, said that Opec oil ministers had begun phone consultations on increasing production quotas by a further 500,000 b/d in an attempt to stem prices.... But analysts said the market was taking Opec’s willingness to increase production as confirmation of the strength of physical crude oil demand and remained unconvinced that the market will not shrug off any new production increase, much as it did the last one. ‘The lack of impact that additional Opec crude is having is indicative of a market in super-bullish mode and an environment where almost all news is being interpreted positively,’ said Kevin Norrish of Barclays Capital.

Meanwhile, Russian figures reinforced the view that there was little room for non-Opec oil producers to increase oil supply, as they were already near capacity. Data revealed the world’s second biggest producer pumped 9.3m b/d in March, unchanged from February.

Posted by DeLong at April 4, 2005 06:51 PM