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A year of two halves

IF THE RUN-up to nearly $150/b in the first half of 2008 was the third oil shock, does the slump below $50/b by December count as the fourth? The second half of 2008, in its own way, was as spectacular as the first, as a seemingly relentless cycle of downgrades to GDP and oil-demand forecasts caused oil prices to drop by around two thirds in value. In the first six months, Opec, with limited spare production capacity, could not stop prices from rising. By mid-December, it appeared to have the opposite problem. Cuts of 1.5 b/d from 1 November failed to prevent prices from falling. Given the cartel's poor record on compliance, the market wanted hard evidence that the promised Opec cuts are be

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