Oil prices (BZ=F, CL=F) are rising after Libya's eastern government reported a halt in exports. Tensions in the Middle east also continue to escalate as Israel and Hezbollah exchanged fire over the weekend.

Kpler Head Analyst, US Matt Smith joins Market Domination to give insight into the situation in the Middle East and its impact on oil prices.

"So if we address the demand side of the picture, we have been seeing oil prices being dragged lower because of that. We've got through the peak of summer driving season here in the US. You have refineries that are going into maintenance. And so you are moving into this slower demand period of the year," says Smith. He also notes that OPEC has been keeping a floor under prices.

For Libya's announcement, Smith states: "Because the country exports the vast majority of its production, when you see their production shut in, then you see that showing up pretty pretty soon afterwards, straight in the real-time data in terms of affecting their exports."

He continues with: "There's absolutely no lag with that happening in terms of Libya. So this is going to have an impact on the market and fairly swiftly if we do see this shut in really carried on."

For consumers at the pump Smith predicts: "The oil price is the key driver of prices at the pump. And so as we saw oil prices drop $10 a barrel from early July to sort of mid August, that's what has helped to drag prices of the pump lower. All that said, we should expect them to continue to edge lower. But with the rise that we've seen today and the rise we may see in the coming days here, that's going to perhaps put a floor under prices, whereas otherwise we'd be drifting towards that $3 mark."

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This post was written by Nicholas Jacobino