Speculative investments have not significantly raised the price of oil, one expert has claimed.
According to Angus McPhail, global oil and natural resources analyst at Alliance Trust, recent rises have been sparked by supply and demand issues, meaning there is no investment bubble caused by speculation.
He said: "Oil markets remain tightly controlled by supply and demand. China is increasingly leading non-OECD demand, which is currently more than offsetting weakening demand from the US and other OECD countries."
Factors such as geopolitical risks, industrial inflation and the possibility of natural disasters could see oil prices rise further, potentially making the commodity a good investment, he added.
While production has been increased, the extra oil is of a lower standard meaning it is less likely to have an impact on prices, Mr McPhail stated.
Yesterday, Jeff Chowdhry, head of emerging equities at F&C Investments, claimed that emerging markets should make good investments as areas such as Russia and Brazil are well placed to ride out the economic downturn .
Speculative investment not driving oil price, expert claims
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Speculative investment not driving oil price, expert claims
Wed, 02 Jul 2008
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