The Oil price is now in a downtrend, having broken the 200 day moving average to the downside. Although it is flirting with $92 for WTI and $106 for Brent, in all probability it will now head down, thank God. One in ten High Street shops in Britain lies empty, no thanks to reduction of spending power of the consumer due to high energy costs and the harsh budget cuts the government has imposed.
People are dying of hunger in the developing countries, where there is no social security provision, as food prices have gone up due to inflationary pressures created by the price of oil. Yemen is an example. Tunisia, Egypt, Morocco are others. Kenya, Bangladesh, Pakistan are yet more examples.
In India the industrial production has become stagnant, and likely to deteriorate, as Oil price has hit very hard. Air India and Kingfisher Airways have not been able to pay their fuel bills for last seven months, and pilots have started to report sick as they have gone without pay for many months.
Job creation in the U.S. has slowed down, attributable to the high price of Oil.
Cause and effect, it is observable that when the Oil price is high, economic activity starts to slow down, and inflation starts to creep in.
A few months ago, the Saudi Oil Minister, Sheikh Ali Al-Naimi was shocked. "There seems to be no rational reason for the Oil price to be so high". He was right, but the price remained high with the 'war premium' with threat of embargo in the Persian Gulf.
Now the Iranian authorities have allowed IAEA to have a look and ascertain for themselves that Iran has no secret nuclear ambitions and is only wishing to continue developing its nuclear programme for peaceful purposes i.e. energy generation.
It is high time the fifteen percent 'war premium' be removed, and the rhetoric be cooled off. Why should the rest of the world pay and suffer? In the midst of an Oil glut currently, with high stockpiles, the case is confirmed for a lowering of the Oil price.
I sincerely hope the people of influence are listening to my words, and can take the necessary action to avoid the world economy from a further slowdown. For that I pray.