OPEC WEEKLY OIL PRICE CONTINUES TO RISE

Vienna, April 4 (Xinhua)- The weekly average price of the Organization of Petroleum Exporting Countries (OPEC) kept rising from 110.63 of the previous week to 111.04 U.S. dollars per barrel last week, growing above 111 dollars once again since the fourth week of August 2008, the Vienna-based cartel said Monday.

The lasting confrontation between the government forces and the opposition in Libya makes the prospect of a stable situation in this OPEC member state so that to produce its crude oil again even more remote.

At the same time, the political instability of the other oil producers in the region of Middle East and North Africa also has aggravated the concerns on the future oil supply reliability in the Middle East. These factors have been pushing the international oil prices upward recently.

In addition, as it was reported that the European Central Bank will raise interest rates, the exchange rate of U.S. dollar against euro declined sharply last week. The falling dollar also became another factor pushing oil prices higher.

A decline in the U.S. dollar often inspires investors to purchase commodities including crude oil.

Since commodities including the crude oil are dollar-denominated, the depreciation of dollar means lower purchase prices of these commodities to the investors with non-dollar currencies, and who would certainly invest in commodities to hedge inflation risk.

Last week, the positive U.S. economic figures also boosted the oil prices. The figures released by the U.S. Department of Labor on April 1 showed the U.S. unemployment rate in March fell to 8.8 percent, presenting the lowest level over the passing two years.

On the same day, it appeased a significant increase in the international oil prices, even hitting a new high since September 2008 to its close. The OPEC oil price also reached a record high since August 22 2008 on that day.

For a period of time in future, the situation in Libya as well as Middle East and North Africa will continue to be an important factor affecting oil prices. The volatility of the situation will remain as the subject of market speculation.

Additionally, with the start of the summer driving season, demand on gasoline is also likely to increase.

The consequence of nuclear accident in Japan is also an important factor having impact on oil prices.

For at least some time, the accident would cause repressive effect on the application and development of nuclear power worldwide, and may even lead some countries to reduce or even give up the nuclear power, which would cause a growth in demand on fuel oil to generate electricity on the other hand.

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