By IANS,
Vienna : Weekly average oil prices of the Organization of Petroleum Exporting Countries (OPEC) rose to $122.87 per barrel last week, the Vienna-based cartel said Monday.
Prices last week reached its highest point since July 2008, as they continued to rise for five consecutive weeks. Compared with February this year, oil prices have increased by $12 — or 10 percent — per barrel.
There are various factors pushing up oil prices.
First, there is the geopolitical crisis due to the Iranian nuclear issue. As OPEC’s second largest exporter of crude oil, Iran controls the Strait of Hormuz, the world’s most important sea transport line of crude oil, reports Xinhua.
Other important crude oil exporting countries are also in the Gulf region.
Analysts fear an escalation of the Iranian nuclear issue could lead to a military conflict, resulting in a shut down of transportation links.
Secondly, optimism in the crude oil market about Greece avoiding default through debt restructuring has pushed up prices.
The rise of the euro due to progress made in resolving Greece’s debt crisis coupled with the falling dollar promoted investment in crude oil futures, thus lifting prices.
Thirdly, oil prices were boosted by positive economic figures from the US. According to official statistics, 227,000 new jobs were created in the US in February, far exceeding earlier predictions.
News that the economic situation is the world’s largest crude oil consumer is getting better lifted investor sentiment, caused the Standard & Poor’s 500 index to rise 0.3 percent to 1,370 points, and caused a spike in oil prices.
Oil prices are expected to remain high given the long-term nature of the fears plaguing the market. With prices continuously rising for a month to record highs, there is also possibility that speculators will release more oil into the market to maximize profits.