Rather than calm the waters, the no-fly zone set up by the U.S. and its allies and the bombing of pro-government forces have caused crude prices to rise even higher amid expectations of greater civil unrest elsewhere in the Middle East. Supply is not the problem and is not the problem in the foreseeable future. Crude inventories continue to build while gasoline had a larger than expected draw and distillate was flat in today's EIA report. Ever since political unrest drove out the regimes in Tunisia and Egypt, the market has been skittish about the political problem spilling out onto Saudi Arabia. The market knows that these high prices may not be sustainable but clearly is worried about being surprised by the fall of a pro-Western supplier such as Saudi Arabia.
Today: WTI +$1.29, $105.75; Brent -15¢, $115.54; gasoline +1.61¢, $3.0212; distillate -1.9¢, $3.0561.
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