Both these companies reported much higher profit rises than consensus analyst forecasts had expected this week. Guess which one was overshadowed by a massive oil spill clean-up?

In fact BP’s 135 per cent increase versus forecasts of 85 per cent compare perfectly well to Shell’s 60 per cent increase versus a 30 per cent forecast.

But investors are of course are concerned about the cost to BP of containing the leak from last week’s Gulf of Mexico accident in which 11 workers are believed to have died – the fallout from which is drawing some rather ominous comparisons to the Exxon Valdez incident.

It wasn’t speculators, and it wasn’t fundamentals – at least, not short-term fundamentals.

The key to understanding what has driven crude oil prices since the financial crisis began, according to a new paper by Bassam Fattouh, is what oil market participants chose to believe about long-term fundamentals.

The Oxford Institute of Energy Studies fellow, who wrote a long paper for the world’s energy ministers last month on how oil prices (covered more briefly by us) are determined, argues that 2009 had two unusual characteristics:

- First, it witnessed the sharpest increase in spot oil prices in decades.

- Second, in the second half of 2009, it exhibited a high degree of relative stability despite a very uncertain and volatile global economic environment.

So, how did the stability arise after the tumultuous events of the previous months and years? And what are traders choosing to believe in 2010?