I recently posted that a major contributor to the increase in crude oil prices and thus the spike in the price of gas was commoditiy speculation.  Yesterday the United Nations declaration of a no-fly zone in Libya sent crude prices tumbling.  Within fifteen minutes crude had dropped 3%.  This price had nothing to do with the supply and demand of oil but instead with the “potential” that crude supplies could be reduced if the Libyan oil facilities were damaged or the oil supply from the country dried up.  It wil be interesting to see how this development plays out.  Ghadaffi had immediately announced a stoppage in military action but today it is apparent that thist was empty rhetoric as opposition positions were again under fire from artillery and mortars.  If in fact Englnd and Italy launch air strikes and then if Ghadaffi hits the oil facilities in rebel controlled territories we may once again see the price of crude bounce up.  Add the unrest in Saudi Arabia and Bahrain and Yeman and who knows where the final price of crude will be bid up on the world commodity markets.

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