Oil prices have pulled back from the century mark, but supply worries could help to keep oil prices near these heights. I’m keeping a close eye on the global hot spots that were major factors in crude surging nearly 60 percent last year – because they could be the catalysts for oil prices to pop or drop in 2008.
In a report out today, Robert Johnston, director of energy and natural resources at Eurasia Group, writes “it is likely that political factors--most notably OPEC” will be determining factors. But he adds:
“Mirroring economic worries that originated in U.S. housing markets and spread elsewhere, geopolitical worries are spreading and increasingly include events even in non-oil producing regions like Pakistan.”
While the decline in U.S. inventories helped propel oil prices slightly over $100 a barrel yesterday, it seemed to be in violence in Nigeria that initially triggered the run up this week – with militant attacks on New Year’s Day in the oil-rich region of Port Harcourt.