Investors spurn rising oil prices for telecoms

In just over two years, the oil price has more than tripled, and hit a nine-year peak of $34 per barrel earlier in the year. It now stands at approximately $30 per barrel. According to Kermit Schoenholtz, analyst at SalomonSmithBarney, the surge in oil prices poses a significant inflationary threat but should not be over-estimated. Schoenholtz notes that: "As a result of improved energy efficiency, the US now generates nearly 80% more real output per BTU (British Thermal Unit) than in 1970, prior to the first oil shock." Schoenholtz also points to recent research which indicates that th...