Oliver Lewis

    Blame Twitter for the increased oil prices

    Blame Twitter for the increased oil prices
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    The BBC are reporting that unleaded petrol has now reached 130p per litre and are blaming Libya. I¹m not convinced. Libya only accounts for about 2.3 percent of global oil production and even now the Arabian Gulf Oil Co¹s production in east Libya is around a third of normal levels.

    The real cause of the current price increase seems to be Twitter and Facebook. The social networking sites are allowing protestors to organise uprisings with a sophistication and speed which have taken analysts completely by surprise. Increased oil prices are the market¹s response to all this uncertainty and the possibility of this revolutionary fervour spreading.

    It's not unreasonable: after all, four of the top ten oil producing countries in the world are in the Middle East. The role of social networking is something which the highly-paid financial analyst hasn¹t been trained to deal with. This is a whole new type of revolution, there are no precedents or models and consequently the markets are over-reacting to events in the area. It¹s no coincidence that yesterday¹s news about further arrests in Iran was followed shortly by an increase in the price of oil futures.

    So the real cost of these Twittered revolutions, for us, is an unpredictable, hyper-sensitive market. Is it a price worth paying for the freedom of the Arab people? I think so.