Paper Outlook — Cutting the Bottom Line

Greater uncertainty was injected into expectations for the fourth quarter and beyond by the sudden flare-up of conflict between Israel and Lebanon (or at least its Hezbollah faction). Some stability had been returning to oil prices—albeit at an elevated level—as the world market adjusted to the level of tension in the Middle East. However, talk of Syria and Iran having played a part in the conflict at least opened the possibility of a wider conflict that could lead to energy price shocks.