Monday, September 24, 2012
The above shows oil prices (WTI and Brent on the left scale, and the spread between them on the right scale).
Oil prices continue to seem driven a lot by news flow, with much of that being general economic optimism and pessimism. For example the structure of prices in 2012 with a peak in March, a trough in June, and then rising prices since, is not that different from that of the S&P 500:
In turn this probably mainly represents increasing pessimism about Europe in the late spring and early summer, followed by increasing optimism as the possibility of greater action by the ECB to back peripheral bonds made a catastrophic resolution of the European crisis appear less likely.
At any rate, oil remains near $120 for Brent and $100 for WTI, despite a pretty weak global economy, suggesting that increasing the supply remains hard work.