The Wall Street Journal posted oil production numbers for March that disclose the shortfall from the Libyan conflict. When the news hit the tape, Brent Crude exploded to the upside trading at $120.17 per barrel, up $1.47 (12:45 EDT.)

Here are the stats:

• OPEC production fell 411,000 barrels per day to 29,343 million bpd.
• Libya's production fell 343,000 barrels per day, from 1,396,000 bpd.
• Nigeria fell 107,000 barrels per day due to Royal Dutch (RDS) Oil maintenance.

To make up for the shortfall, Saudi Arabia increased production by 500,000 barrels per day to 9.05 million bpd. Kuwait upped production by 37,000 barrels per day. Arab Emirates increased their production by 90,000 barrels per day.

Here's the real kicker. OPEC's seaborne exports are expected to fall by 530,000 barrels per day in the next four weeks.

Sometimes we have a strong bias concerning which way a stock or commodity will move. Let's take gold and silver. Let's assume that you believe the turmoil in the Middle East, especially in Libya and Syria, is bullish for gold. Let's also assume that the weaker U.S. dollar is good for gold.

You hold on for the past two weeks with the Mideast getting worse, and with the dollar getting weaker, and nothing happens. Gold just meanders. You start to wonder if you've done the right thing buying gold.

Here it is in a nutshell: Prices of grains and cotton have skyrocketed year to date. The United States Department of Agriculture's (USDA) report released Thursday stated that corn and wheat prices have doubled in the past year. Soybeans were up 50% and cotton was up 155%, as reported in the Wall Street Journal.

What has caused these sharp increases? The key mover has been exports. China, India and countries in the Mideast are stockpiling grains over fears that they will not have enough to feed their people. Corn in storage fell 15% on March 1. Corn has been hit doubly hard because 40% of it is used for ethanol production and a large amount goes for livestock feed.

U.S. stock futures are higher this morning as investors are awaiting economic data. Futures for the Dow Jones Industrial Average gained 51 points to 11,629.00 and futures on the S&P 500 stock index climbed 8.30 points to 1,262.20. Nasdaq 100 futures rose 10.25 points to 2,218.75.

The weekly jobless claims are expected at 8:30 a.m. ET, as well as February's consumer price index. The Federal Reserve will issue industrial production figures for February, and the Philadelphia Federal Reserve Bank will report on regional economic activity.

When it comes to the biggest threat to world economies, oil scarcity is second only to nuclear war. What started in Tunisia, then spread to Egypt has now spreading to Bahrain and Iran, where protesters are clashing with police. In Iran, lawmakers are threatening death to protesters.

The fear of chaos spreading across the Middle East has sent the oil market into overdrive. Brent crude traded at $104 per barrel Tuesday.

It was a marvelous invention, this thing we called "securitization." Another word that is thrown about is "mortgage backed securities." Mortgages were packaged together and resold to large investors and pension funds.

Why in the first seven years the securitization market just went wild. By 2007 Citigroup, Inc. (C) estimated that $8,000 billion worth of assets were securitized which represented more than half of all the credit created in some sectors. And there were tubs of champagne all over the place.

Like any other bubble, it burst.

Stocks are expected to open modestly higher on Wall Street after a losing week last week. On Friday, stocks fell for the third straight day after reports on new-home sales and durable goods proved weaker than expected, leading investors to believe the economy has not yet emerged from the recession.

Stocks to watch today include pharmaceutical giant Johnson & Johnson (NYSE: JNJ), which agreed Monday to buy an 18% stake in European drug maker Crucell (NASDAQ: CRXL) for 301.8 million euros ($440 million), as part of a deal to develop flu vaccines.

The G-20 is meeting again, this time in Pittsburgh, and as is so often the case when the world's industrial powers gather, the operative phrase is 'lower your expectations.'

What can investors look for? Well, one thing investors should not look for is any G-20 type of action on banker compensation/bonuses, other than a call for each nation, 'to do more to ensure that constructive incentives are in place' to prevent a repeat of the lending practices/perverse incentives that helped trigger the global financial crisis. There is support for compensation caps in Europe (except Germany); however, the United States and United Kingdom oppose them, so the issue is a non-starter.

Yes, it is a holiday, but there are some markets open -- and they aren't doing all that well. With financial markets in London, Japan, and the United States shuttered for holidays, trading volume is thin -- and stocks are lower.

In Germany, the country's Ifo business-climate index fell short of expectations for May. The index did show a rise in activity during the month, but it only rose to 84.2 when 85 was expected. The survey is being called a "clear disappointment." One bit of data that wasn't disappointing was the ZEW indicator of German economic sentiment, which increased to 31.1 in May from April's reading of 13.0. This reading seems to indicate that many investors think the worst of the global crisis is over.

Would you believe that oil imports actually rose last month? The increase also caused an increase in the U.S. Trade Deficit to $57.2 billion dollars. Contrary to what you might expect, the US bought more oil last month than the month before. Yes, you heard it right. And people who started using public transportation when the price of gas was about $4.00 per gallon continued to use public transportation to date. It seems that our large refiners were able to sniff out that a cut in Saudi production was coming so they loaded up on inventory to beat the production cuts.

Supposedly the cuts were made. Yet there are some analysts who believe that the Saudi's did not, in fact, cut production and continued to produce the oil at the same levels. There are also those who beleive that even with production cuts by OPEC that they will not be enough to drive up the price of crude oil much higher. In fact some are even predicting that the price of gas will fall to $1.25 per gallon by next spring.

OPEC meets next week. It will be interesting to see exactly what their cuts will be and what effect these cuts will have on the price of crude oil.

Following the Dow and the NASDAQ here in the Americas, European and Asian markets almost unilaterally lost any previous gains, as the major indexes all fell. Both Henry Paulson and Ben Bernanke were both being pitched in the media as potentially saying the credit market losses were hurting the U.S. economy. As a result, the U.S. dollar was at a record low against the euro.

If it's not one thing with the U.S. economy, it's another, when it comes to the complete mess the mortgage overextension problem has created. Said Roberto Mialish from Unicredit Markets & Investment Banking: "The markets are reacting negatively to the renewed credit crisis in the U.S. and that's hurting the dollar across the board ... the market is speculating that Bernanke will offer a gloomy outlook for the U.S. economy.''

Below is a foreign market review for this morning:

European markets:

• The Dow Jones Euro Stoxx 50 Pr: at 3,132.37, down 83.87 (-2.61%)
• The FTSE 100 Index: at 5,173.10, down 127.30 (-2.40%)
• The DAX 30: at 6,049.42, down 150.83 (-2.43%)
• The S&P/MIB Index: at 27,059.00, down 689.00 (-2.48%)

Asia/Pacific markets:

• Nikkei 225 Average: closed at 12,754.56, down 255.60 (-1.96%)
  
• The S&P/ASX 200 Index: closed at 4,815.70, down 105.30 (-2.14%)
  
• Hang Seng Index: closed at 21,174.77, down 839.69 (-3.81%)

Interesting article this week in the MIT Technology Review (OK, so I don't understand most of it, but I still aspire to be a geek) in the wake of the trading losses announced by Société Générale at the hands of rogue trader Jérôme Kerviel.

Last week, the French bank disclosed the $7.2 billion loss. In the wake of the disclosure, Bank of France chairman Christian Noyer declared to a French senate finance committee, "None of the controls within Societe Generale seem to have worked as they should have."

Interviewed in the article, MIT's Andrew Lo, head of the university's Laboratory of Financial Engineering, said that given the fact that all software systems have a human interface, "I would argue that it is impossible to prevent these disasters with 100 percent certainty."

To say the least, this has been one interesting and turbulent week for the stock market. We saw international markets crash for two days, severe down action, a three-quarter point emergency interest rate cut by the Fed, a $7 billion mistake in France and work on a rebate package in Congress.

It can be a little hard to understand international markets and how they all work. But allow me to use an analogy to explain their interaction.

We all grew up in a family, and one of the most important people in the family is Mom. Mom does a lot of work -- making meals, doing laundry, cleaning the house and even working outside of the house. Families can have very complicated interpersonal dynamics in them. There is a saying that "if Mama ain't happy ... nobody's happy." And I think there is some major truth to it.

But it applies to international markets as well. The U.S. market is the "mama" and the most important player. The $13 trillion U.S. economy is bigger, stronger and more dynamic than each of the other markets, and if it has troubles, other markets have troubles as well.

While the euro has risen by as much as 40% against the dollar since 2002, emerging market currencies have only seen gains of 17%.

Should investors sniff an opportunity?

Well, yes and no.

An article out this morning by the Financial Times examines this disparity.

The FT says, "Fear is part of the answer. Investors haven't forgotten the emerging market currency devaluations of the 1990s and early 2000s. For them it's 'no thanks, too risky.'"

Investors already hold emerging market equities in their portfolios, and according to the FT, investors might feel that these equity positions suffice for currency exposure.

I have been wondering lately if the sagging value of the dollar is actually going down through economic gyrations or being pushed down by design.

There are many repercussions. No one less than Rodrigo Rato, head of the International Monetary Fund, warned Monday of a potential "abrupt fall" in the US dollar that could roil the global economy. "There are risks that an abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," Rato said at the close of annual meetings here of the IMF and the World Bank, according to news reports.

Here is what is really on his mind: Europe may take steps to temper the strong appreciation of the Euro, which is weighing on exports from the 13-nation bloc. "There is a risk that exchange rate appreciation in countries with flexible exchange rates -- including the Euro area -- could hurt their growth prospects, and that in these circumstances protectionist pressures could worsen," he said.

From my perspective I have wondered if the Bush administration is at least applauding the weak dollar as it improves U.S. trade imbalances, helps prop up the stock market and worried investment bankers, and strengthens American companies in many regards.