Oil Prices Jump and Its Not Just
Because of Iraq

According to the Economist, it's not just Iraq that is causing oil prices to move upward. Three other factors also come into play.

"One is the coldest winter in the northern hemisphere for many years. Demand for oil, always higher during the northern winter, has risen sharply. Another factor is the big drop in American oil stocks, now at their lowest level for years. Even the Bush administration’s declared readiness to release some of America’s massive contingency reserve of oil has failed to calm fears about the impact war might have on already tight supply. The third factor keeping the oil market tight is supply constraints outside the Middle East. The lengthy strike in Venezuela had a big impact, especially in America, its main customer. Although the strike has finally ended, experts reckon it could be months before Venezuelan exports are back to pre-strike levels. And traders are now getting rattled about possible interruptions to supplies from Nigeria if there is trouble there in the run-up to the presidential election in April."

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