Escalation In Oil Prices

Crude oil has touched the price of $126 barrel from $ 50 barrel at the beginning of the year 2007.Following had been the combination of factor affecting the rise in oil prices , setting inflation at new high through out the world .
1. Lowering of the value of the dollar - Due to the fall in the value of the dollar against major global currencies , it has made oil cheaper , driving purchases across the world .
2. Pension & hedge funds - These funds are having large volume of the cash following rate cuts by the Federal Reserve and have aggressively bought oil assets .
3 . Requirement - Industrial growth in emerging markets such as China & India have increased the demand of oil many fold.
4 . Refinery problem - Refiners in USA top consumer of the oil are facing drained inventories .
5 . Political unrest - Attack of militants on Nigerian oil installation , US - Iran conflict and problem faced by the Iraq oil industry are contributing to the rise in oil prices .