Brent crude oil futures are increasing in value as civil and political unrest heightens in Libya as the North African Arab nation's leader of 42 years struggles to tamp down threats to his grip on power which already claimed the Mubarak regime in neighboring Egypt, CNN reports.
Anti-government protests are gaining steam in the oil-rich Middle East, spreading to Bahrain, Yemen, Djibouti and Iran. Libya produces approximately 1.6 barrels million barrels of crude oil per day, according to an oil analyst, which gives its revolution major geopolitical implications.
"Now it's starting to look like the entire region's on fire and it looks like it could spread to other parts of the region," Peter Beutel, oil analyst with energy risk management firm Cameron Hanover, told CNN. "This thing is getting worse and worse and worse and it could spread to Saudi Arabia and that's the big fear."
At 1:15 p.m. on Tuesday, Brent crude oil futures were up 0.49 percent, a 0.52 cent climb to $106.26 per barrel.
Beutel said Saudi Arabia produces 8.4 million barrels per day and other analysts also are keeping an eye on one of the U.S.' closest allies in the Middle East.
"Markets have always relied on Saudi Arabia to act as the swing producer, boosting output if supplies were disrupted elsewhere," Win Thin, global head of emerging markets strategy for Brown Brothers Harriman, told CNN.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.