Saudi volatility leads to further hike in oil prices

Uncertainty surrounding Saudi stability feeds more oil price rises.

Oil prices have risen 2% amid fears of unrest in the world's largest oil producer, Saudi Arabia.

Despite promising to meet the shortfall after Libya's 75% drop in production due to the uprising, the Saudi stock market fell 5% this weekend after 119 academics, businessmen and activists wrote an open letter to the ageing King Abdullah, demanding reform.

A 'day of rage' has also been planned for the 11th March in the capital, Riyadh, with participants on the Facebook group swiftly rising.

Corruption and nepotism are rife in the country, whilst unemployment, poverty, and poor housing are also common complaints, particularly among the youth.

These factors have sparked new fears that Saudi oil production will be affected. Not only does Saudi Arabia produce the most oil in the world, it also has the largest spare production capacity.

King Abdullah has already spent billions on concessions, including a 15% pay rise for public sector employees.