It’s a sign of over-heated and highly
speculative markets when any half-truth or rumour is treated as excuse for a
price spike. The nonsense that’s all over the place this morning about North Korean
skyrockets pushing up local petrol prices is such a sign. Those rockets aren’t
much chop, but they’re not oil-fired either.

Oil prices have long since departed from
fundamentals, to the concern of oil producers and consumers alike, but it’s
extremely tenuous to try to put President Kimmy Look At Moi on
the same footing as the concerns over Iran. Iran has
the world’s second biggest supply of oil. North Korea has SFA.

While international tensions of any sort
aren’t good for markets, there are lots of other factors behind oil’s run above
US$75 a barrel. It finished above that mark again this morning, but Reuters’
calmly rational report doesn’t mention North
Korea. US oil
inventories, Nigeria and Iran yes, President Kimmy no.

Which leads to the
spike in local petrol prices yesterday. I’ve long been sanguine about the usual
petrol conspiracy theories pushed here every time prices rise – but if the
local refiners have found an instant method of translating spot crude prices to
the pump and at any time suggested North Korea was to blame, maybe
they do need a thorough roasting after all.

Peter Fray

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