(AFP) – 1 day ago
LONDON — World oil prices
held above $102 on Friday, with the market under
persistent pressure from the ongoing political crisis in Egypt.
Brent North Sea crude for delivery in March rose 43 cents to
$102.67 per barrel in London trade, one day after striking $103.37
-- the highest level since September 26, 2008.
New York's main futures contract, light sweet crude for March,
gained 46 cents to $91.00 per barrel.
Analysts expect the spread in the price between Brent crude and
the benchmark New York contract, also known as West Texas
Intermediate (WTI), to widen further because of oversupply in the
US port of Cushing, Oklahoma.
Brent spiked back above $100 this week, rocked by violent
protests in Egypt that have raised serious concerns about the
security of energy supplies travelling via the Suez canal to the
West.
Egyptian protesters massed on Friday for sweeping "departure
day" demonstrations, in an attempt to force President Hosni Mubarak
to quit after he said he would like to step down but fears chaos
would result.
Tens of thousands filled Cairo's central Tahrir Square, the
epicentre of the 11 straight days of protests that have shaken the
pillars of Mubarak's three-decade rule, on the Muslim day of
rest.
"Oil markets are still on edge regarding possible worsening of
turmoil centred on Egypt," said Sucden analyst Brenda Sullivan.
"Today is the called-for 'day of departure' ... President
Mubarak has said he wants to go, but he fears worsening of the
situation if he were to step down now.
While Egypt is not a major crude producer, the country is home
to the Suez Canal, which carries about 2.4 million barrels daily,
roughly equal to Iraq's output.
"Thus far transit through Egypt has not been seen to have been
affected, but the risk to transport as well as the risk of supply
disruptions in other nations in the region are likely to continue
as a major factor in the energy markets for some time," added
Sullivan.
Traders are also concerned about the wider ramifications of the
events in Egypt on the oil-rich but politically volatile Middle
East.
Research house Capital Economics said oil prices were also being
buoyed by strong global energy demand.
"The bulk of the rise in oil prices over the last few months
reflects buoyant global demand rather than uncertainty in the
Middle East," it said in a research note.
"OPEC has plenty of spare capacity. Of course, oil prices would
surely rise much further if there were any serious disruption to
production elsewhere in the region or to traffic through the Suez
Canal," it added.
"But there is still no sign of this and little reason to expect
it. In particular, none of the major players in this crisis, and
certainly not any new government trying to find its feet, would
have any desire to lose the business from the canal."
Later on Friday, meanwhile, traders' attention will turn to
crucial January non-farm payrolls jobs data from the United States,
for cues on the health of the world's largest oil-consuming
nation.
Federal Reserve chairman Ben Bernanke said the economic recovery
was gaining pace, but cautioned that victory could not be declared
until the jobs market improved.
The oil market was also bolstered this week by upbeat
manufacturing data in China, Germany and the United States. That
sparked hope of a strengthening global economic recovery