Financial Market

Oil prices reached new highs in Tuesdays trading which saw them approach $120 a barrel for the first time.

US light, sweet crude eased to $118.11 in Asian trading, having risen as high as $119.90 due to concerns of global supply, brought on by growing violence in key oil producing nations.

London’s Brent crude peaked at $116.75 a barrel on fears of further attacks on pipelines in Nigeria, falling output in Mexico and the continued weak dollar. Together these factors have pushed oil prices up 24% this year alone.

To add to the woes the oil producing cartel OPEC has shown itself disinclined to raise quotas to curb rising prices.

“The bulls are certainly in control of the oil market right now,” said Victor Shum, from energy consultants Pervin & Gertz.

There is also the added worry of further price rises with figures due later today expected to show further declines in weekly US petrol refineries.

Recently increased disturbances in Nigeria have pushed oil prices steadily upwards. Shell has reported that continued attacks on its pipelines have lead to a fall in supply of 169,000 barrels a day.

The attacks that are being made by anti-government rebels on the regions oil infrastructures have gradually been escalating and threatening any future investment in the oil rich area of the country.

Mexico is also reporting a drop in oil exports down 8% this year. As opposed to political unrest, these shortages are being brought on by gas fields being exhausted.

The exhaustion of natural resources is a growing problem that itself is pushing oil exploration and investment into ever more hostile environments that then become susceptible to problems similar to those being seen in Nigeria.

News broke today that the Britain’s biggest bank are preparing themselves for a high court defeat in the test case over overdraft charges.

On Thursday a judgement is expected which will determine whether or not the Office of Fare Trading can rule excessive banks charges as unfair.

If the OFT wins then it is expected to decide that charges imposed by banks on overdrafts are in fact too high and therefore unlawful.

Since the issue came to light in 2006, hundreds of thousands of bank customers have attempted to reclaim banks charges on the ground they were too high and unfair.

Due to the amount of cases that were taken to court both the OFT and the banks agreed to stage a test case that has meant putting on hold tens of thousands of claims.

“A decision in favour of customers would be massively significant. Public confidence in the banking system is at an all-time low,” said Marc Gander of the Consumer Action Group.

An estimate on the BBC website stated that in 2007 around £748m was refunded to nearly 378,000 customers throughout the UK.

It was in July last year that it was agreed that the test case would go ahead after the OFT agreed a deal with Seven banks and the Nationwide building society. Consumer group Which? Has outlined the three possible outcomes of the case.

An outright win for the OFT. The court could rule that all terms and conditions for all the test case banks over the last 6 years can be assessed for fairness.

An outright win for the banks. The court could rule that none of the terms and conditions used by any of the test case banks over the last 6 years can be assessed for fairness.

Something in between. The court might decide that some terms and conditions are subject to fairness assessment, while others are not.

Whatever the outcome Which? Admitted that this case will not decide whether charges for overdrafts are in fact fair or not.