Near $100 doesn't seem to matter
13 Nov 07

Simply put, oil seems to have lost the power to shock.

British companies have been holding up despite oil prices almost reaching $100 a barrel. According to Gareth Evans of UBS, companies have been able to ‘restructure themselves and have been able to deal with this higher input cost’.

But that doesn’t mean that these companies will be able to shrug off further rise in the oil price. Strong global demand, especially from emerging markets, has muted the impact of a weak dollar on UK international competitiveness. The weak dollar has in fact reduced the impact of dollar denominated prices such as that of oil.

However, with predicted slowing global demand, British companies may begin to falter. A triple whammy awaits – slow global demand, high oil prices and a weak dollar.

Links:
Companies shrug off fuel impact – so far – The FT (13 Nov 07)