Oil prices has reached a three-month high of about $114 for a barrel of Brent crude. The spike in prices has at least three causes. The first is the explosion of a refinery owned by Chevron Corp. (NYSE: CVX) and located in California. The second is a belief that some of the world’s largest nations will begin stimulus packages that will lift gross domestic product and therefore demand for commodities.
The third is lingering worry about trouble in the Middle East, particularly with Iran. The nation continues to threaten to shut the Strait of Hormuz, an important passage for crude-laden tankers, if sanctions against it because of its weapons programs continue.
Douglas A. McIntyre