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The limits of oil's rebound

Like other commodities, oil now operates under a regime of competitive pricing.

Unpredictable shifts in supply and demand will cause fluctuations within the oil price trading range - the top and bottom of which will be set by marginal producers' costs.


FOR the first time since last October, the price of a barrel of oil has broken through US$50. So it seems a good time to update the analysis I presented in January 2015.

Back then, I argued that US$50 or thereabouts would turn out to be a long-term ceiling for the oil price