Oil producers are one of the few commodity exposures at present that can put aside tepid global growth forecasts and taper talks, which are ordinarily bearish for the commodity. Geopolitical forces are going to override this for the time being. Unrest in the Middle East is something we have become accustomed to but what we are experiencing now with Egypt is decidedly different.
Oil prices have been driven higher by continued concerns that unrest in Egypt could disrupt global supply. In Libya, protests have left only one port open, resulting in reduced exports. We could be facing a serious reduction in transportable oil.