Rocketing oil prices have taken a bit of a pause for breath after reaching a new all-time high for Brent of $74.22 a barrel. Analysts said some investors have decided it’s time to sell and lock in their profits. US light crude dropped down to around $71, while in London, Brent eased back to $72.45. It has risen by around $10 a barrel in the last month due to supply concerns.
Profit taking also brought down metals prices on the commodity markets, including a sell-off of gold, though it remains near record highs.
Commodity broker Malcolm Freeman explained what has been happening .. and why: “Gold and oil, to an extent, are having a correlation. Oil is getting everyone nervous. There’s all these rumblings about preemptive strikes in Iran – whether or not that happens is beside the point – and also the Iranian are making some fairly strong statements against the Israelis. That causing destabilistation in that area and there’s a definite move towards people using gold as a long-term hedge, if you will, against disaster.”
Industry experts said the long-term trend remains upwards for oil. That because there are worries about the size of stockpiles of petrol in the United States, on top of the supply losses in Nigeria and the row over Iran’s nuclear programme.