Oil prices will rise higher as global economy prospects improve over time. However, dramatic shifts and spikes could upset the fragile recovery and have unintended consequences which could lead to greater demand destruction for fossil fuels altogether, much to the dismay of oil exporters who are investing heavily in fossil fuels.
The world could experience a period of significant volatility, with oil prices leaping upward and oscillating between $125 and $175 a barrel for some time.

But don’t get the Saudi champagne out just yet as it may not translate into petrodollars flowing into the Gulf coffers. READ MORE HERE

Oil and gold are poised to benefit from the dithering policies of Western leaders and the possible launch of the Fed’s Operation Twist. Other commodities are set see a run-up thanks to tight supplies.

The world’s major commodities had a phenomenal run in the past two years, but cooled down in the first six months of 2011.

Within the first six months of the year, only two commodities - silver and coal - saw a double-digit rise and only six of the 14 main commodities were in positive territory. READ MORE HERE

With Opec seemingly irrelevant, the GCC is trying to find a balance between responsible crude suppliers and their own domestic needs. But, as Deutsche Bank warns, their own high breakeven prices are making them even more vulnerable to oil price shocks than before. READ MORE HERE

Erste Research Group’s excellent report on oil crunches some fascinating data on oil and its current short-term and long-term influence on the global economy. We picked ten charts to highlights some key findings from the report.
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