In Nigeria rebels attacked an oil-transfer facility causing supply production slowdown. As a result to that, investors started to fear supply disruption as Nigeria is known to be Africa's biggest producer as Royal Dutch Shell Plc reduced their output which caused prices to rise again above the $116 per barrel.
In addition to that prices started soaring the day before Nigeria as Turkish warplanes hit bases in oil-rich Northern Iraq. Due to both geopolitical pressures crude contracts gained $3.80 as it closed at $116.32 while recording a high of $116.80 per barrel and a low of $111.78 per barrel.
Today supply and demand factors still continue to rule markets as oil steadies above the $116 per barrel. Oil prices couldn't spike much as it is limited due to the gaining greenback. Investors are not that attracted to oil as they once were since they entered the crude oil markets as a hedge against inflation and the falling dollar, but since the USD is strengthening not that many investors were pulled towards the crude oil market. Today prices opened at $116.50 while recording a high of $116.78 per barrel and a low of $116.05 per barrel so far.
As long as there are geopolitical tensions in oil rich nations, crude oil prices will be pressured to the upside but might be limited as long as the US dollar's strength prevail. The release of the job's report on Friday helped brighten the outlook for the US economy as it indicated that the slowdown witnessed in the US might not have be as severe as once thought to be giving hope in the hearts of investors that the series of rate cuts might have come to an end which will cause a significant rebound in the dollar. As a result, crude prices will start to decline easing inflationary pressures as well.