- Title: USA/EGYPT: Global oil prices surge on Egypt uncertainty
- Date: 2nd February 2011
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (JANUARY 31, 2011) (REUTERS) WIDE VIEW OF THE TRADING FLOOR OF THE NEW YORK MERCANTILE EXCHANGE (NYMEX) VARIOUS OF CRUDE TRADERS ON THE NYMEX TRADING FLOOR A NYMEX TRADING BOARD TIM JENNINGS, PRESIDENT OF VANTAGE TRADING LOOKING AT A SCREEN NEW YORK CITY, NEW YORK, UNITED STATES (JANUARY 31, 2011) (ORIGINALLY 4:3) (REUTERS) (
- Embargoed: 17th February 2011 12:00
- Keywords:
- Location: Egypt, Usa
- City:
- Country: USA
- Topics: International Relations,Energy
- Reuters ID: LVACXGVGNT1F6B3CNSU04SM373FK
- Story Text: Brent oil, the benchmark for most European, African and Middle East crude grades, jumped above $101 (USD) a barrel for the first time since 2008 on Monday (January 31) and U.S. prices surged above $92 (USD) on concern that unrest in Egypt could spread to Middle East crude producers or disrupt Suez Canal flows.
Egyptian President Hosni Mubarak overhauled his government to try to defuse a popular uprising but angry protesters rejected the changes and said he must surrender power. The Suez Canal continued to operate normally.
OPEC Secretary General Abdullah al-Badri said the producer group would boost oil supply in the event of a real shortage, but did not expect current unrest in Egypt to affect the Suez Canal or SUMED pipeline oil flows.
Cold weather supporting heating fuel demand and supportive economic data from the United States in the form of better Midwest factory activity and firmer consumer spending also helped keep bullish price momentum intact.
In London, ICE Brent crude for March rose $1.36 to $100.78 a barrel by 12:41 p.m. EST (1741 GMT), having reached $101.08, the highest since prices reached $103.29 on Sept. 29, 2008.
U.S. crude oil for March delivery rose $2.20 to $91.54 a barrel, trading as high as $92.34. Analysts and brokers expect Brent's push above $100 to help U.S. crude retest resistance at the $92.58 peak from Jan. 3.
Traders at the New York Mercantile Exchange (NYMEX), the world's largest commodities exchange, said that the price surge of crude oil is only and initial reaction and that traders are looking out for possible long term impact.
"I think it's a knee jerk reaction initially but I think that the traders are really looking at the long term implications of a change in regime in Egypt and how that will affect the whole balance of power in the Middle East. And what that will mean for supplies of crude oil from that area," said Tim Jennings, who is the president of Vantage Trading.
Egypt controls the Suez Canal and the Suez-Mediterranean (SUMED) Pipeline, which between them moved over 2 million barrels per day (bpd) of crude and oil products in 2009.
Shipping has so far proceeded as normal through the 192-km (120-mile) Suez Canal shipping choke point but port operations have been slowed by the protests. Jennings said that he is not worried.
"I think unless there is some major disruption in the supply channels I don't think that this ultimately affects the supply and demand picture and I think that beyond whose- the regime change and that sort of thing its these producers need money and I think they will produce regardless of what's happening with the underlying political environment," he said.
Demand for political change in Egypt comes just two weeks after Tunisia's president was overthrown. The unrest in Egypt has killed more than 100 people. - Copyright Holder: REUTERS
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