(EnergyAsia, April 11 2011, Monday) — Crude oil prices closed at their highest levels since September 2008 on the worsening unrest and conflicts in the Middle East and Africa, and further weakness in the US dollar.
Brent crude oil prices gained nearly US$8 last week to finish at US$126.74 a barrel while laggard US WTI ended Friday at US$112.79 a barrel.
Traders expect both benchmarks to trade higher this week as they expect further unrest and violence in Yemen, Tunisia, Syria, Egypt, Palestine, Ivory Coast and Nigeria while the civil war stalemate in Libya has worked to the detriment of oil supply.
Gaddafi has succeeded in stopping the NATO-backed rebels from exporting more oil after they were able to ship one cargo out. Following the outbreak of civil war in February, Libya has seen its 1.6 million b/d production plunge by 80% to between 250,000 and 300,000 b/d.
The continuing weakness in the US dollar has helped fuel a strong global rally in commodity prices including oil this year. While the US government did not shut down last week after the warring Democratic and Republican Parties succeeded in tying up a last-minute deal, the truce is far from settled. The dollar is expected to resume its decline.