All aspects surround crude oil has helped the black gold to leap yet once again to set fresh record territories. The bullish wave was strongly initiated on Friday the last trading day last week, after news of an attack on a key pipeline in Nigeria. The attack on the Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta was another violent attack on oil industry targets that the movement promises further to come in Africa's largest producer.
Shell confirmed the leak in the pipeline caused by explosives, and they reported that they have already isolated the line for repair and a small production capacity had been shut. For that we say Crude Contracts for May delivery surge $1.83 setting a new record high closing at $116.69 after setting the high at 116.97 as the move reversed strongly the bearish spike that throughout the session dragged oil to set the intraday low at $112.72 per barrel. Crude prices advanced 6% last week which is the biggest weekly gains since February 2007.
Today in the early Asian session the bullish momentum continues to support oil prices as fears of inadequate supply still roam the markets. Comments over the weekend by OPEC officials that the organization was not considering tabled proposals to enhance supply in the market, as they continue to assure that the supply is adequate and the current levels of oil prices are a result of a combination of factors that revolve the dollar weakness and speculative trading. Contract for May delivery which will be settled tomorrow rose to a fresh new high in early Asian electronic trading of $117.05 and until the afternoon the contract set the low at $116.39 and now is currently trading around 116.60s per barrel. May's contract expires tomorrow and the contract with higher volume of trade today which is the June settlement contract is currently trading around $116.08 opening at the high so far of $116.54 and setting the low at 115.86 per barrel.
OPEC secretary-general, Abdullah el al-Badri, was quoted saying in an energy conference in Rome, that prices express further potential to the upside and that the organization is will to increase production capacity if the reason was supply shortages, though he was clear in stressing that it was not the driver behind the bullish momentum saying Oil prices, there is a common understanding that has nothing to do with supply and demand.
The oil market continues to present a very lucrative investment for traders as the returns from the commodities markets, especially energies have outperformed equities and the safety of governmental bonds, and since the dollar remains weak on the medium-term and stocks are still affected by very high volatility as the uncertainties revolving the end of the credit meltdown has yet to be verified, oil will remain to the upside affected as well by geopolitical tension in Africa, Iraq and Iran that is expected to experience a new round of sanctions that Tehran promised will retaliate, while still the hurricane season is about to start and mother nature may present more threat to supply disruptions in the marketsâ€¦