$100 oil a reality

The price only touched the $100 level for the front-month futures contract but is enough to start headlines. We thought the highs were behind us after oil came down from the high $90's in November. Economic growth has been slowing which has been the main culprit for the run-up in prices during 2007, but we have forgotten the other key driver with oil, geopolitical risk. The Middle East has been relatively calm. Nigerian rebel unrest suggests that we may have some early supply disruptions which are exacerbated with the declining inventories.

All we need now is some cold January weather to send prices above $100!