Monday, April 19, 2010

Oil prices cause alarm in some quarters

Commodities investors who have benefited from rising precious metals prices in recent months may be a bit more wary when it comes to another key resource - oil.

This is because financial experts are becoming concerned that oil prices could be rising at a rate that will impede the slowly emerging economic recovery around the world.

A report this week in London's Financial Times newspaper noted that the current $87 price level for a barrel of oil is inviting speculation that the commodity is headed back over $100. This would raise the danger of a double-dip recession by increasing the existing financial burden on consumers and businesses.

The newspaper added that some major Wall Street institutions predict that oil will be priced above $100 next year, due in part to increased economic activity.

Investors who are unconvinced that the current recovery will take hold have a handful of options to consider when it comes to stability. For example, dealer gold has long been seen as a safe haven investment during times of uncertainty.