As the US economy remains in recession it continues to drag down the greenback as investors lose confidence in the US currency. While the dollar lacks investors' sentiment, crude markets welcome many investors as it becomes a hedge against the falling dollar and inflation. Also the market attracts foreign investors as they hold a stronger currency. Yesterday prices remained above the $130 as it gained $1.38 and closed at $132.19 while recording a high of $133.71 per barrel and a low of $130.16 per barrel.
Today tensions occur in Africa's largest oil exporter, Nigeria as militants attack an oil pumping station managed by Royal Dutch Shell Plc. adding to the current insufficient supply in the market pressuring crude oil prices even higher. Nigeria also being OPEC's eighth biggest member by output so far this year cut short production by as much as 164,000 barrels per day. Also Asian countries will continue to support the rise in prices as they have increased demand ahead of Beijing Olympic Games. The markets today opened at $131.68 while recording a high of $133.46 per barrel and a low of $131.59 per barrel.
This time in the markets supply and demand factors are not the only market movers like we have been witnessing lately, but also the weak dollar has helped support the spike in oil prices. As long as the unrest remains in the crude markets while tensions steady occur in Nigeria, crude oil prices will continue to surge adding to economies inflationary pressures.