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Crude Rises as Berlusconi Ready to Resign

November 9, 2011 at 3:06 by Vladimir Vyun

Crude oil extended its rally after Italian Prime Minister Silvio Berlusconi agreed to resign. The speculation that Iran is developing a nuclear weapon further boosted the crude’s rally.

Berlusconi lost majority in the Parliament after many allies deserted him. Now, the Prime Minister will stay in office until the austerity measures, needed for receiving a bailout, will be implemented and then steps off. Traders considered this to be a positive development as the change of leadership may bring fresh breath to the battle with the debt crisis.

The International Atomic Energy Agency said yesterday that Iran was performing “work on the development of an indigenous design of a nuclear weapon including the testing of components”. Iran is the second biggest oil producer in the OPEC and any political or economical instability in the country may have a big impact on the global oil supply. Obviously, development of a nuclear weapon can easily lead to political turmoil.

Crude oil traded today at $115.59 per barrel today as of 3:01 GMT on ICE, following yesterday’s jump to $116.47 per barrel — the highest price since September 8.

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