05.07.2009

There has been an increase volatility in oil and gas prices (namely prices moving up and down). In theory, after periods of volatility, commodity markets should eventually revert to a price that reflects fundamentals of supply and demand because they are underpinned by raw materials. If buyers do not emerge when prices are high, a surplus will build and prices deflate. Volatile oil and gas prices can be affected by oil speculators on the one hand or supply and demand on the other. Predicting oil prices is a predictably risky business. One of the largest uncertainties is whether the market in late 2008 early 2009 will echo the early 1980s when prices collapsed and stayed low for much of the next two decades or whether it will prove more like 1998 when prices fell to $10 a barrel after the Asian financial crisis but rebounded within a few years as economic growth picked up

Gina Cohen
Natural Gas Expert
Phone:
972-54-4203480
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