Oil prices took a big step in that direction Friday, with benchmark futures rising 5% and topping
Aviation executives have said even
Airline shares plunged Friday, cutting short a midweek rally spurred by deep capacity cuts at
The argument echoes that made by Goldman Sachs analyst Argun Murti, who has said it is increasingly likely oil prices could spike as high as
U.S. lawmakers and regulators, unconvinced supply and demand fundamentals fully explain the oil price spike, are looking into oil markets for signs of manipulation and undue influence from speculators.
Inventories of U.S. crude oil are down by 35 million barrels since March, Slorer said, which is helping to drive the price of oil higher. Slorer said he didn't see a "quick fix" to the problem of higher prices, because he didn't see oil imports slowing by a surprising amount any time soon.
He also blamed the effect of oil subsidies in oil exporting countries, and didn't see them being abandoned by their governments despite international pressure. Subsidies mean consumers in high-growth countries aren't fully feeling the effect of rising prices, easing pressure that otherwise would force them to use less fuel.
Slorer said that the decisions of
Few governments that subsidize gasoline for their citizens will trim those subsidies and may even increase them, Slorer said, because most countries with gasoline prices lower than the U.S.'s about
"We reckon that higher price of crude will only lead to higher subsidies in oil exporting countries," he said.
The only subsidizing emerging economy that could potentially cut subsidies and have an effect is