Concerns about global petroleum supplies and outlook for the US dollar and economy, have kept oil prices in Asia hovering around US$133 a barrel. Oil prices have also been supported by news of an attack by militants on an oil pipeline in Nigeria. Oil prices are expected to rise further with the launch of the American summer driving season, expected to increase demand for diesel and gasoline. If the reports on U.S. consumer confidence, new home sales, gross domestic product and other key economic data, expected this week, indicate a weakening trend, the dollar can be expected to get pushed lower, which would in turn boost oil prices. Oil and other hard commodities are seen as hedges against a weakening greenback and inflation. Also, a weak dollar, the currency of international oil trade, makes petroleum products less expensive to Asian and European buyers.
The market continues to be shrouded by worries of growing pressures on global diesel supplies as demand in China surges. Over the weekend, China's top economic planning agency again urged oil and power companies to make sure there are enough supplies for earthquake-hit areas and for the Beijing Olympic Games in August.