There are plenty of explanations for what’s happening in the global oil markets. It’s caused by the economic boom in the world’s largest developing countries, particularly China and India. It’s caused by the unwillingness of the oil cartel Opec to pump more crude.
Against the backdrop of the gloomiest outlook for the global economy in many years, the price of oil hit a barrel for the first time last week and the cost of wheat, rice and soya beans soared. The first rule of economics — that prices are determined by demand and supply — appears to have broken down.