Oil prices look set to rise again

Friday saw a slight retracement in oil prices with Brent crude giving up US$0.69 to close at US$100.21 on profit-taking and easing of geopolitical pressures on the withdrawal of Turkish troops from Northern Iraq.

However, this morning the crude oil markets again look to advance as fresh investor monies enter the commodity suite in general, and oil in particular. Key drivers are the continuing weakness of the Dollar and uncertainty over the outcome of Wednesdays OPEC meeting.

The Dollar is suffering on comments from Fed officials that interest rates may have further to fall in an effort to stave off a full-blown recession and whilst this would ultimately be detrimental to oil sales, of immediate concern is the OPEC meeting and supply issues - violence flaring in Nigeria and the tension on the Venezuelan/Ecuadorian border coupled with the fire at the UK gas terminal last week - which serve to give oil its firm tone. In the US oil prices smashed through the previous inflation-adjusted high of US$102.53 (€67.37) to reach US$103.05 (€67.71).

The prospects for the week ahead are centred around Wednesdays OPEC meeting - no increase in production is expected but positives may be drawn from any communiqué released. Choppy trading is set to be the order of the day until mid-week when a pull-back from the highs is anticipated.

Brent crude range for today US$98.70-US$101.00 (US$64.86-US$66.37)