Middle East Unrest,Crisis Spreads: Crude Oil Price Rise Again
Posted: Tuesday, March 01, 2011
by Dakhsh Jain
Winfromus.com
Crisis continues in the Middle East region as unrest now spreads on growing violence
Crude oil price rise again on Tuesday and Dow Jones – U.S stock market falls on oil fuel recovery worries as Nymex Crude Oil closes above $100 per barrel, up more than 3.5% and brent crude rose over $115 per barrel.
Iranian security forces fired tear gas in clashes Tuesday with protesters demanding the release of opposition leaders, the website reported. Though later on Iranian authorities denied the reports .
The Iran protests are among the latest uprisings that have churned through North Africa and the Middle East, a crucial region that's responsible for most of the world's crude exports.
Oil Market Experts, Analysts are betting big on Crude Oil, Nomura Sees Oil At $220!!
Recently we have heard Nomura predict oil could hit $220 if oil supplies from Algeria where to go off line while Boone Pickens told CNBC that $120 a barrel was possible.
Also David Murrin, in his recently published book "Breaking the Code of History" the hedge fund manager who runs Emergent Asset Management writes that he believes by 2025 there will be a major conflict over the fight for commodities and resources. Murrin, unsurprisingly given his views on a regional conflict, sees oil hitting $200 a barrel.
"Middle Eastern crisis will lead to an 'energy shock' for the West, increasing stagflation," he predicted. "China to become closer trade ally with oil-rich Sunni regions as well as Iran."
Bernanke says rising oil price poses threat to the U.S Economy
Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that a prolonged rise in oil prices would pose a danger to the economy. But he said a more likely outcome is a temporary and modest increase in consumer prices, not runaway inflation.
A prolonged rise in the price of oil or other commodities would represent a "threat" to economic growth and to inflation, Bernanke acknowledged.
How long would Oil Price take to stabilize – Few days? A week? Weeks or Months? Who knows!
The unrest which has forced oil companies in Libya to evacuate workers and shut down production operations has so far not had a major impact on world petroleum supplies, as refineries turn to other countries for oil including Saudi Arabia, which can crank up its production by another 5 million barrels per day.
The market is well supplied for the moment, particularly in the U.S. where weekly inventory data Wednesday are expected to show rising crude-oil stockpiles. Analysts surveyed by Dow Jones Newswires expect oil inventories increased by one million barrels last week, along with a 200,000-barrel increase in gasoline stocks.
The concern is that spare production capacity is now declining faster than expected, which means supplies could be harder to find in the future as global consumption increases.
It's impossible to say how long it will take for uprisings to play out, but energy markets likely will be on the edge through the next few weeks or months may be. When the risk is in so many different countries having unrest or negative developments, it's only natural and psychological that prices stay up in the market. Even if things calm down in Libya, then people will start looking at Oman, Iran.
Year 2011 has brought many issues with itself from all around. The middle east regions stays open to uncertainty over leadership and the many fears that all this unrest might just lead to Civil wars. If the situation worsens and spreads in other oil producing regions, then the whole world economies would be in a state of emergency and collapsing, indeed.
Crude Oil Price and Stock Market Future for remaining 2011 now depends on the developments we see around.
Inputs: Yahoo Finance, WSJ.
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