Crude oil gained for a fourth day in New York, the longest rising streak since December, as escalating violence in the Middle East and Africa threatens to prolong supply disruptions.
Futures advanced as much as 0.7 percent after Syrian security forces detained at least 200 protesters while unrest showed no sign of ending in Yemen. U.S. Senator John McCain said rebels in Libya need more assistance in the fight against Muammar Qaddafi’s forces. Saudi Arabia, holder of the world’s largest crude reserves, has no plans to raise production capacity, an oil official said.
Political developments in the Middle East and North Africa are providing the main support for prices, according to a report from JBC Energy received by e-mail today.
“The oil market remains fraught with uncertainty,” the Vienna-based analysts said. “Most of it is related to possibilities in the future, including the developments in all the geopolitical hotspots, the inflation threat and its impact on the economy,” as well as a possible decrease in demand due to high prices.
Political unrest leads to decreased supply -- at a time of rising demand. You do the math.
And read this update from Prof. James Hamilton.
While it's nice to have someone to blame (this evil people on Wall Street and traders in general) the reality is the commodities markets are being driven by pure supply and demand right now. I realize that's a far less exciting story, but that's what the data says.