a global shortage in the supply of crude oil will also
affect the refineries in Singapore, a cutback in supply of
oil products to Hong Kong seems unlikely at present.
The imminent outlook for oil prices
6.
price-inelastic
Given that the demand for oil products is rather
particularly in the short term, a shortfall
in supply, even though it is very small relative to the
world total supply, could generate considerable pressures
for an upsurge in oil prices. Thus we see the price per
barrel of crude oil rising from a low of US$15 a couple of
US$17-18 during July as tension emerged at
months ago
the Gulf.
to
At the OPEC meeting on 26 July, a price of $21
per barrel was agreed. With Iraq's invasion of Kuwait and
the outbreak of the crisis early this month, the price of
crude oil surged to a high of US$28-29 before easing back
to around US$25 ag other oil producers undertook to
increase their production.
7.
It is widely believed that, even with a fairly
of the crisis, the price of crude oil
prompt settlement
will not fall too much below the current level. Thus a
more optimistic
outlook would he for
price in the
US$21-25 range.
However, the latest developments regarding
Iraq's aggressive attitude and the massive build-up of
military strength in and near
increasingly worrying
scenario.
the Gulf area point to an
Moves
to
incroaco mil
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