Oil prices are within sight of a two and a half year high, driven by United Nations-backed air strikes on Libya and escalating unrest across the Middle East.
Japan's triple disaster of earthquake, tsunami and nuclear crisis, which could suppress demand in the near term, weighed on prices early last week, but on Tuesday Brent crude was still above $114 a barrel.
Last month, it had climbed to nearly $120 a barrel.
The following lists the main bullish and bearish factors in the oil market:
LOST LIBYAN SUPPLY
Libya pumped around 1.6 million barrels per day of crude before heavy fighting between Muammar Gaddafi's forces and rebel troops, followed by U.N.-approved air strikes, slashed production to less than 400,000 bpd.
Oil exports have been shut off and reports of damage to Libya's oil infrastructure could push prices higher. Analysts are divided on whether foreign military intervention will resolve or prolong the conflict in Libya.
Edward Meir of MF Global noted oil prices fell once fighting started in the two Gulf Wars as markets sold the fact after buying the rumor, but this trend has yet to be seen in Libya.
The loss of Libyan crude, prized by aging European refineries for its low sulphur content, has supported higher prices and increased premiums for alternative light, sweet grades, particularly the better quality Nigerian streams.
UNREST IN THE MIDDLE EAST
Markets are increasingly nervous about violent unrest spreading further across the Middle East, home to leading OPEC producer Saudi Arabia, the world's only "swing producer" -- with enough spare capacity to compensate for serious production shortfalls elsewhere.
In Syria, one of the region's most authoritarian regimes and a minor oil producer, crowds set fire to ruling Baath Party headquarters in an uprising that has left at least four dead, while in Yemen the killing of dozens of anti-government protestors prompted the country's ambassadors to the United Nations and Syria to resign in protest.
Tension increased between Bahrain and Iran as tit-for-tat diplomatic expulsions followed Tehran's anger at a crackdown on Shi'ites, enforced with the help of troops from Saudi Arabia.
The kingdom has not seen the kind of mass uprisings that have rocked the Arab world, but dissent has built up as unrest has taken root in neighboring Yemen, Bahrain and Oman.
Saudi Arabia has said it could provide additional light crude for Europe to make up for any shortfall left by Libya and industry sources said the kingdom has produced just under 9 million barrels per day (bpd) so far in March.
But exports have not risen and spare crude has been put into storage, suggesting oil supply is not as tight as prices imply.
Members of OPEC have repeatedly said there is no need for the group to call an emergency meeting to reassess formally its output policy before the next scheduled talks in June.
At close to $115 a barrel, Brent is far above the $70-$80 range which Saudi Arabia has said it favors as high enough to generate returns for producers, but not so high as to damage the world economy and consumer demand.
Speculators net long positions in U.S. crude oil futures hit an all-time high in the week to March 8 as violence in Libya stoked uncertainty in the market.
The U.S. Commodity Futures Trading Commission said money managers, the key speculator group including hedge funds and other investors, had raised their net long positions to 274,235.
In the week to March 15 money managers reduced their net-long positions to 251, 380, the CTFC said.
"This adds to volatility," said Olivier Jakob, analyst at PetroMatrix. "Speculators have helped prices get to their current levels but it also means the day they move to take profits the setbacks (in prices) are going to be potentially very violent."
JAPAN EARTHQUAKE, TSUNAMI, NUCLEAR CRISIS
A 9.0 magnitude earthquake rocked Japan on March 11, triggering a tsunami that crippled reactors at the Fukushima nuclear plant, releasing radiation directly into the atmosphere.
As Japanese engineers battled to prevent further explosions and nuclear meltdown the market was trying to get to grips with what the triple catastrophe meant for oil prices.
Risk aversion swept global financial markets in the first few days of the nuclear crisis, prompting a sell-off in riskier assets such as commodities and equities. A perceived short-term drop in demand from Japan, the world's third biggest exporter, also weighed on oil prices.
In the longer-term Japan is likely to burn more oil to replace power lost from the crippled nuclear reactors, some of which may never come back online. Higher oil consumption during reconstruction efforts should also be bullish for crude prices.
EURO ZONE DEBT CRISIS
Portugal is widely expected to follow fellow euro zone peripherals Greece and Ireland in requesting an international bailout package to solve its crippling sovereign debt crisis.
Spain and Italy are also struggling with high government bond yields, and although unlikely to need a rescue package, highlight the European Union's two-speed economic recovery.
Industrial powerhouse Germany is calling for higher interest rates to curb inflation, while in the southern Mediterranean periphery a rate hike risks tipping countries into recession and destroying demand for oil.
OIL PRICE SPIKE
Brent crude soared to nearly $120 a barrel on February 24, a high last seen in August 2008 just before the global economy tumbled into recession. By December that year prices, which were already on their way down, had plummeted to less than $40.
Although factors other than high oil prices alone combined to create the financial crisis, a return to those levels could curb growth, reduce consumer spending power and derail the nascent global recovery.
"Each $10 per barrel rise in oil prices, if sustained, potentially adds 1 percent to inflation and takes off 0.5 percent from GDP so is an unhelpful headwind to the economic recovery," said Richard Batty, investment strategist at Standard Life Investments.
(Reporting by Nia Williams)