mario monti

Oil prices got a boost today because of continuing conflicts in the Middle East region and a weak dollar index, which slipped 0.07% on the prediction of more stimulus measures from the Federal Reserve.

Brent crude gained 64 cents to $107.94 a barrel, while US crude rose by 28 cents to $85.84, reported Reuters.

On Monday, further discussions were held between The White House and House of Representatives Speaker John Boehner’s office, to end the fiscal cliff deadlock, which failed to provide any solution that could avert the world’s top oil consumer from entering into another recession.

Meanwhile, in Italy borrowing costs increased and share prices slipped, as Prime Minister Mario Monti announced that he would resign early, raising concerns that the country will probably drift away from economic reforms, which are needed to ensure the nation emerges from the financial crisis.

Mario Monti’s announcement was made as the Organisation for Economic Co-operation and Development on Monday said that economic growth in Italy and China may turn around soon.

In China, crude imports increased in November 2012, as refinery runs reached a record of more than 10.1 million barrels a day (bpd).

Oil prices, however, have received support throughout the year due to the ongoing conflicts in Middle East – including fresh unrest in Egypt, fighting in Syria and Iran receiving pressure from global super powers to stop its nuclear programme – that threatened to disrupt oil supplies.

The 12-member OPEC group will meet on Wednesday in Vienna to discuss the supply outlook, which is expected to stick to its target of 30 million bpd, an amount agreed upon in 2011.

Iranian OPEC governor, Mohammad Ali Khatibi, said that the members are jointly helping the oil stocks rally during this period of weaking demand, by producing about one million bpd of crude more than required.

Image: Italian Prime Minister Mario Monti’s announcement on Monday that he might resign early led to increased borrowing costs and a fall in share prices. Photo courtesy of Zinneke.