(EnergyAsia, September 17 2012, Monday) — World oil prices closed last week sharply higher with WTI crude breaking US$100 for the first time since early May and Brent at more than US$117 after the US Federal Reserve promised to launch another round of stimulus.
The oil markets have also been driven all week by escalating tensions in the Middle East as Muslims rioted in the region and around the world in protest against the production and broadcast of a blasphemous movie.
Last Tuesday, the US Ambassador and three diplomats in Libya were assassinated in what appeared to be a well-planned hit. Earlier, Canada abruptly cut ties with Iran, whisking away its diplomats from Tehran in a lightning move for fear that they could be targeted.
The US Fed’s decision to unleash nearly US$500 billion of liquidity was preceded by the European Union’s announcement that it would be buying its own bonds and China’s launch of a US$157 billion infrastructure building programme.
Despite threats by the US and Europe Union to release oil from their strategic stockpiles, the oil markets look well supported. There are forecasts that Brent could be ready to re-test the 2008 record high prices of over US$145 a barrel in the coming months.