HOMO EMOTIONALENSIS:

Oil markets await details of hurricane impact (Sheila McNulty in Houston and Carola Hoyos in London, August 29 2005, Financial Times)

Anan Shihab-Eldin, acting OPEC Secretary-General told an energy conference in Oslo on Tuesday that if economic fundamentals, rather than perceptions of shortages, dominated the oil markets, there could be price stability. “Fundamentals do not justify the current price levels,” he said. “Forty dollars a barrel is a floor, but I could see around $50-55”, he added. “We want to reassure the market that stock levels are building up.” He also backed a proposal by Sheikh Ahmad al-Fahd al-Sabah, the OPEC President, on Monday, to raise output by 500,000 barrels per day at a meeting in September in an attempt to help cool oil prices.

The hope is that markets looked at over a long enough period are rational, but at any given moment emotion predominates.

Posted by Orrin Judd at August 30, 2005 12:00 AM