Oil markets still at risk as prices continue climbing

Saudi might not have enough to fill gap should another Arab country fall, says Platts analyst
Oil markets still at risk as prices continue climbing
OIL PRICE: Oil prices have been climbing since unrest spread through the Arab world (Getty Images)
By Karen Leigh
Thu 10 Mar 2011 11:48 AM

Despite Saudi Arabia’s creation of a crude oil blend that’s
similar to the oil exported from Libya, oil prices are still rising and the
market is still at risk, an analyst said.

“Oil market prices are moving up again, despite what Saudi
Arabia has said it will do to bolster it,” Kate Dourian, Middle East editor at
Platts, told Arabian Business.

“It’s still very bullish. The risk factor is still high
despite the fact that Saudi created the special blend of crude.”

Continuing unrest, particularly in top Opec producer Libya
and Bahrain, Saudi’s closest ally, is also effecting the markets.

“People are worried that another crisis will make it very
tight and [Saudi’s exports] wouldn’t be able to fill the gap,” Dourian added.
“People are eating into their spare capacity – supply could become tight if we
had another stoppage.

The market is wary of the spread of revolution to somewhere
else. There’s concern about potential unrest in Saudi, given what’s going on in
Bahrain.”

Earlier this week, Saudis staged small-scale protests
throughout the country. The government has given its nationals money and
incentives to keep them from rebelling.

“The King has been ill, there’s potential for a power
struggle in Saudi – all of this factors into the markets,” she said.

Oil prices have been climbing since unrest spread through
the Arab world. The conflict in Libya, one of the globe’s top producers, has
had the biggest impact on prices.

In summer of 2008, they reached record highs of $140 per
barrel. Economist Nouriel Roubini told Arabian Business this week that global
markets would not be affected unless the prices went up “another 15 to 20
percent.”

 

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