Middle East Politics And Al Qaeda: The Primary Determining Factors For Crude Oil Prices

Crude oil fell 14 cents for January delivery to $78.63 a barrel, pressured by a firmer dollar against the yen.

The primary concern for crude in the short term, however, is the terrorist group Al Qaeda’s intention to attack the Saudi pipeline - which if executed, will push oil prices higher. In the mid-term, Middle East politics - especially peace in Iraq (which has vast undeveloped reserves and unexplored territory) - will help in lowering oil prices.

Crude is expected to trade in the $70-$80 range in the early part of 2010 if any major political developments do not take place, according to energy economist James Williams, President of WRTG Economics.