Oil-price swings have doubled this year as unrest spreads through the Middle East, source of one- third of global crude supply, hampering producer and consumer efforts to stabilize the world's biggest commodity market.

As officials from more than 90 nations including Saudi Arabian Oil Minister Ali al-Naimi and U.S. Deputy Energy Secretary Daniel Poneman gather in Riyadh tomorrow to seek ways of curbing fluctuations, oil's 20-day historical volatility has risen to 29.4, according to data compiled by Bloomberg. It was at 12.6, an all-time low, at the end of December. U.S. futures for April jumped as much as 4.5 percent today as violence spread in Libya, holder of Africa's biggest crude reserves.

Oil has risen to a two-year high, with Brent crude prices in London exceeding $105 a barrel today, as the Middle East turmoil stoked concern that shipments from the region may be disrupted. Libyan leader Muammar Qaddafi's son warned yesterday that a civil war would risk the country's oil wealth as security forces attacked protesters, killing more than 200, according to New York-based Human Rights Watch. Nations including Iran and Bahrain are cracking down on opposition groups demanding change amid upheaval that's toppled leaders in Egypt and Tunisia.

"Prices gyrate wildly with each new headline," said Mike Fitzpatrick, Energy Overview editor in New York, and a former futures broker at MF Global. "If more moderate and friendly-to- the-West governments like Jordan or Bahrain topple, $100 may not be so ridiculous as it seemed only a few days ago."

David Fuller's view Having seen governments in Tunisia and Egypt overthrown relatively quickly, at least some of the other states experiencing uprisings are likely to crack down harder on demonstrators. Among these are Bahrain and especially Libya, judging from latest developments, and we can expect the same from Iran.

How might this affect the markets?

Tunisia was initially viewed as a isolated incident and markets only wobbled briefly during the Egyptian uprising. Egypt has problems a plenty, compounded by the recent chaos, but it is not a major oil and gas exporter. It experienced a largely bloodless revolution, thanks to the Egyptian military's restraint.

However as the uprisings have spread, major oil producers are affected, commencing with Bahrain and Libya. The struggle has become more violent. These unprecedented developments have suddenly become a problem for the markets. No one can know in advance how it will all end, or when, but investors will not like the uncertainty, not to mention trend.

While the Middle East remains the epicentre of investor concern we can expect more volatility in commodity markets, including upward pressure on gold, silver, platinum, palladium and crude oil (Brent & NYME). Interestingly, the US dollar has yet to perform like a perceived haven. However long-dated government bond prices have checked their recent declines. Wall Street, overdue for some mean reversion towards the 200-day MA, will find it more difficult to levitate against this background.