Independent journal on economy and transport policy
01:28 GMT+2
Role of Egypt or Suez Canal insignificant in spike in oil prices
(The Economic Times)
February 7, 2011
The unrest in Egypt has been named as one of the main reasons for an 8% jump in the crude oil prices in the past 10 days to a level above $103 per barrel. However, the role that Egypt or Suez Canal plays in global oil industry today is insignificant.
Global oil inventories remain above fiveyear average and the OPEC retains significant spare capacity to meet any contingency. It appears that the rising oil price has just been a knee-jerk reaction. In fact, an increasing number of oil market participants are betting on a correction in oil prices. At one time in the past, the Suez Canal used to be a major bottleneck for crude oil flowing from the Middle East to Europe and the US. Till around 1975, around 10% of world’s oil supply used to pass through the Suez Canal ...... Read more on The Economic Times
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