Oil prices reach almost $100 on Egypt crisis

31st January 2011, Comments 0 comments

World oil prices rose to within a whisker of $100 a barrel Monday on fears that violent unrest in Egypt could disrupt the flow of oil through the Suez Canal on its way to the West, analysts said.

Brent North Sea crude for delivery in March struck $99.97 a barrel in Asian deals. Crude last hit $100 dollars in October, 2008.

In later London trade, it pulled back to stand at $99.20, down 22 cents compared with the close on Friday.

New York's main contract, light sweet crude for March, was up 76 cents at $90.10 a barrel.

"The rising prices reflect continued tension in Egypt and the possibility that there would be (supply) constraints through the Suez Canal," said Ben Westmore, minerals and energy economist for National Australia Bank.

Tom Bentz of BNP Paribas said that about one million barrels of oil pass each day through the Suez Canal, a key transit route for shipments from the Persian Gulf region.

"There is some nervousness about supplies and that could affect Europe more than the US," he said.

On Sunday, Egypt's embattled President Hosni Mubarak tasked his new prime minister with ramming through democratic reforms as thousands of protesters in central Cairo defied a military curfew to demand the veteran leader's ouster.

His instructions to Prime Minister Ahmed Shafiq were read out on state television but had no discernible effect on protesters who vowed to continue their demonstrations until Mubarak stepped down.

Mubarak, who sacked his cabinet on Friday after a nationwide revolt, also said the new prime minister's priority was restricting unemployment and creating new jobs.

Investors are concerned that similar demonstrations -- which have also touched Tunisia, Yemen and Jordan -- could spread elsewhere in the oil-rich Middle East.


© 2011 AFP

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