Oil prices remain volatile, with Brent and US light crude having topped $135 a barrel before they pulled back as traders took profits from the spectacular rally. In addition a slightly stronger dollar – due to improved jobs figures in the US – dampened all commodities prices.
Even the boss of Royal Dutch Shell, Jeroen van der Veer, is puzzled by what is happening. He said prices are rising due to market sentiment rather than a shortage of supply: “This, what has happened to the markets now, is a real surprise to us as well, because what we say and what we see is that there are no physical shortages. There are no tankers waiting in the Middle East, there are no cars waiting at gasoline stations because they are out of stock, so this has to do with psychology in the markets and we cannot forecast psychology.”
The Organisation of the Petroleum Exporting Countries, which supplies more than a third of the world’s oil, agrees and has rebuffed calls from the US to pump significantly more. OPEC Secretary-General Abdullah al-Badri said the cartel can do nothing to lower prices, and called the oil market “crazy.”
The world’s airlines are starting to feel the pinch as oil prices have surged 170% since the start of last year. The biggest carrier by revenue, Air France KLM, has just issued a profit warning and American Airlines is planning to cut flights and jobs.