Soaring prices have spawned a drilling boom and the number of oil rigs in North America has reached the highest level in nearly 25 years, according to Moody's. With pump prices exceeding $4 per gallon in some parts of the U.S. (and even more elsewhere), Moody's says that consumer restraint could curtail oil demand, but adds that "we see little risk of this becoming significant over the near term."The recent spread of political unrest across the Middle East and North Africa has pushed crude prices even higher, as markets started incorporating a higher political-risk premium, which is unlikely to unwind in the short term.
[Source: Houston Business Journal | Image: diaper – C.C. License 2.0]