Crude oil prices rise, but escalating tensions between Koreas feared to impact global trade

25-Nov-10

Despite mixed Asian equity markets and geopolitical tensions between the Koreas, crude oil prices saw an upward trend in Asia. However, prices are expected to decline in line with lower trading volumes ahead of the American Thanksgiving holiday amid the US oil inventory data report due. Earlier, oil prices fell-New York's main contract, light sweet crude for December slipped US$81.2, while Brent North Sea crude for delivery in January settled to US$83.2 in London. Oil prices have slipped on fears that rising tensions between North and South Korea could impact global trade. Additionally, Ireland’s political turmoil in the wake of its international bailout plan has added fuel to fire. The American dollar strengthened by its safe-haven status in times of economic and geopolitical uncertainty. A stronger greenback boosts dollar-priced crude oil, which becomes more expensive for buyers using weaker currencies.