Recent conflict between Russia and Georgia prevented the market from continuing last week’s 8% declines, and crude oil futures traded flat today. The accelerating conflict is over the Georgian province of South Ossetia and could threaten an oil pipeline in that region that produces 1 million gallons of oil each day.
The bulk oil market is also dependent on the value of the dollar. On Friday, the U. S. dollar was at its highest value against the euro in the last several months. However, some analysts see the weak economy as prevention from raised interest rates by the Federal Reserve, which would be essential to the dollar gaining positive momentum. It is feared that the price of oil could fall as low as $113.15 per barrel on Monday and eventually lead to further declines.