Global Biz

Oil prices rise on Egypt unrest; Brent tops $100

(Agencies)
Updated: 2011-02-01 08:51

NEW YORK – A key global oil price contract topped $100 per barrel on Monday for the first time since 2008, as investors kept an anxious eye on Egypt and worried about unrest there disrupting the flow of oil from the Middle East.

While Egypt is not a major oil-producing country, each day about two million barrels of oil pass through the Suez Canal and an adjacent pipeline, both of which are controlled by Egypt. The Suez remains open and shipping has not been interrupted.

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"Those watching it closely do not believe it is terribly likely to happen soon or at all, but recognize the possibility that it could occur," energy consultant Cameron Hanover said.

The larger concern is that the unrest in Egypt could spread to more important oil producing regions like Saudi Arabia. Egypt is by far the most populous nation in the Arab world.

"Given how important a role Egypt plays in the Arab world and in the Middle East, the unrest adds a new level of anxiety to the oil market," says James Burkhard, Managing Director for Global Oil at the analysis firm IHS CERA.

The price of Brent crude rose $1.59 to settle at $101.01 a barrel on the ICE Futures exchange in London. Brent is used to price oil in Asia, where demand is growing fast, and in Europe, where a cold winter is leading to high demand for heating oil.

The price of US benchmark West Texas Intermediate, or WTI, rose $2.85, or 3.2 percent, to settle at $92.19 a barrel on the New York Mercantile Exchange. That marks a two-session gain of about 8 percent.

Brent crude has been trading far above WTI for months. Oil supplies at Cushing, Oklahoma, where the US benchmark is priced, have been rising, keeping its price below Brent.