Oil is once again heading skyward although OPEC has increased output and opened up a new pipeline linking Central Asia with Europe to create an alternative supply of oil for the West.
Oil prices hit $51.90 a barrel in midday trading yesterday, up $5 from the same time last week in Beirut.
The two probable reasons for the rise are that:
. demand is still exceeding supply, particularly in the booming markets of the Far East and
· the U.S. driving season is looming, with a long summer ahead and plenty of SUVs on the roads guzzling gas.
The question that thus arises is that will prices continue to soar to April's peak of $58, or will it exceed even that?
Some analysts believe that if prices continue to push upwards and get into the heart-attack-potential $70 to $80 price band, demand will fall and prices will return to less eyebrow raising prices. However, others dismiss such predictions believing oil prices will continue to rise because demand is more likely to increase than diminish.
Therefore, a lot is likely to depend, in the near future, on whether OPEC is able to adequately build global stockpiles in time for the high demand winter season.
28-May-05 
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