Oil prices 'could rise sharply'

19/12/2008

Oil prices could rise sharply as a result of the weak dollar, an analysis firm has claimed.

According to Petromatrix, many investors in the oil industry are failing to take into account the weak performance of the greenback, with the company forecasting that when this happens it is likely that crude prices will rise sharply.

Such a scenario could in turn lead to a spike in heating oil prices and other distillate costs.

Speaking to Bloomberg, Olivier Jakob, managing director of Petromatrix, commented: "Many large investment firms on Wall Street have been very bearish on crude prices, but they haven't been making this forecast for the dollar."

Crude prices have continued to plunge this week despite a record from the Organisation of the Petroleum Exporting Countries on Wednesday (December 17th).

At a meeting earlier this week held in Algeria, the group decided to constrict production by 2.2 million barrels a day.