Rising oil prices, believes Ali al-Naimi, Saudi Arabia’s oil minister, may soon ‘take the wheels off an already derailed world economy. On the face of things, this concern is absurd. The plunge of $115 in the price of oil from its peak last July to its nadir in December was the most precipitous the world has ever seen. Demand for oil is still falling, as the world economy atrophies. Rumours abound of traders hiring tankers to store their excess oil. Rich countries’ stocks cover 62 days’ consumption, the most since 1993 (see chart 1). The average over the past five years has been 52 days’ worth. Nor are oil firms pumping nearly as much as they could. OPEC has announced three separate rounds of production cuts since September in a bid to steady prices. In all, it has vowed to trim its output by 4.2m barrels a day (b/d). That leaves them with as much as 6m b/d of spare capacity. Despite this growing glut, however, the price of oil has been rising steadily in recent weeks (see chart 2). On Wednesday May 20th it closed above $60 a barrel for the first time in more than six months. […]