Between February and May of this year the oil price went from below $90 to $128 a barrel, a monthly growth of 9 per cent. If the rise continued at this rate, it would mean an unprecedented doubling in price every eight months. In recent days, after the price briefly touched a high of $135, there has been a bout of profit-taking. Although the price has now fallen it has not yet dropped much below $125.

The latest price rise has baffled many. What has happened to supply and demand to cause such a steep and sudden price rise? Gordon Brown, the UK prime minister, said last week that “the cause is clear: growing demand and too little supply”. China and India are buying more oil. Costs of exploration and extraction are going up. Nigeria and Venezuela are causing anxieties about supply. But these factors are not new. Nothing has happened in the real oil economy to justify such a sharp and steep rise in its price.