Oil prices at two and a half year highs

mattInternational, Wholesale Utilities Markets

Oil prices have risen to a two and a half year high due to supply concerns and the strength of the dollar

Oil Refinery

The drop in the strength of the dollar means that other commodities such as gold and silver have also risen in price.

Other commodity prices are also on the increase, such as food, metal and cotton.

The current oil price is at around $120 per barrel.

The conflict in the Middle East has caused concern over the supply of oil with Libya, the world’s 17th largest oil producer having oil fields being targeted by rebel forces. There are also worries that similar civil disruption could spread to larger fuel producing nations such as Iran and Algeria.

Libyan officials have been calling on Nato to protect the oil fields in the interest of the global economy.

Whilst the disruption and concerns about supply continue, the demand for oil has been increasing, mostly due to the growth of emerging economies.

High oil price rises can be an indicator of an impending financial meltdown, just like that of 2008. It is too early to say however, whether oil prices will stay high for long enough to cause serious economic disruption.