Brent oil bounces briefly above $103
Brent crude oil prices bounced briefly above $103 on Wednesday, supported by continuing fears of spreading unrest in the Middle East, traders said.
Brent North Sea crude for delivery in April bounced as high as $103.20 in late afternoon deals. It later stood at $102.65, up $1.01 from Tuesday's closing level.
New York's main contract, light sweet crude for March, added 27 cents to $84.59 a barrel.
"Brent crude continues to remain fairly well supported over spreading unrest throughout the Middle East with Libya and Iran starting to experience problems of their own," said CMC Markets analyst Michael Hewson.
"US crude continues to look a little soft, near two-month lows below $85, though they have rebounded from the lows on a slightly lower-than-expected increase to inventories."
A record price gap exists between New York's benchmark West Texas Intermediate (WTI) crude and Brent due to abundant crude supplies in the United States, where the Cushing depot in Oklahoma is nearly full.
The US government's Department of Energy announced Wednesday that American crude inventories rose by 860,000 barrels in the week ending February 11.
Expectations had been for a larger gain of 1.7 million barrels, according to analysts polled by Dow Jones Newswires.
Prices have risen over the past few weeks amid supply concerns in the volatile region as demonstrators have taken to the streets seeking the ousting of their leaders, with the presidents of Egypt and Tunisia forced out.
The demonstrations have led to similar movements in other Arab states, including Iran, Yemen and Bahrain, drawing inspiration from these successes.
"It's still related to the low level, for now, of spreading unrest in the Middle East and North Africa," said Westhouse Securities analyst David Hart.
"As long as protests continue in Iran, Libya, Bahrain, etc, then the associated risk premium will support higher oil prices."
© 2011 AFP