Supply worries and subsidies by China and India support high oil prices, but Soros says it's speculative

Militant attacks on oil instillations by the Movement for the Emancipation of the Niger Delta the last few days, has increased worries about the status of the world oil supplies. These attacks have helped support the high price of oil as the situation in Africa's largest oil producing country has no visible solution.

Other things aiding to the increased price of oil, is the fact that the biggest Asian consumers, mainly China and India, are subsidizing the oil prices and thus not letting the full effect of the higher prices reach the population. This has dampened the impact on the population and disrupted normal market reactionary effects. Even though some smaller Asian countries are starting to cut down on subsidies, the consumption in these countries is not enough to compensate for the size of India and China in the overall consumption in the area.

Despite the worries of supplies and demand, OPEC has maintained that the rise in oil prices are driven by speculation, political tension and weak dollar. On Monday their statement was supported by the legendary investor George Soros as he claimed that the price of oil was moved by speculation and that it had all the symptoms of a bubble. On the other hand he was not sure the bubble was about to burst, unless US and the UK economies began contracting.