Benchmark U.S. crude-oil futures rose past $102 a barrel in electronic trade Wednesday, gaining on concerns about the Middle East oil trade after Egyptian President Mohammed Morsi rejected calls for his resignation.
Crude for August delivery surged $2.46, or 2.5%, to $102.05 a barrel. On Tuesday, oil prices on the New York Mercantile Exchange closed at $99.60, the highest settlement for a most-active contract since May 2012.
Wednesday’s push past $102 a barrel came as Morsi, in a late-night address carried on Egyptian-state television, said he was willing “to pay my life to protect the legitimacy,” of the democratic process and the country’s constitution. Opposition protesters say the new constitution unfairly favors Morsi’s Muslim Brotherhood movement.
Prices for the August futures contract for Brent crude also extended gains, picking up $1.54, or 1.5%, to $105.54 a barrel on ICE Futures.
Millions of protestors are calling for Morsi’s resignation a year into his term as the country’s first democratically elected president.
Although Egypt doesn’t export oil, it serves as a transit hub for oil through the Suez Canal and the Suez-Mediterranean pipeline.
On Monday, the Egyptian military warned Morsi that it would intervene in the political crisis if Morsi didn’t resolve it within a 48-hour period. The Egyptian government has reportedly confirmed four deaths took place at protests near Cairo University after Morsi’s speech.
If a compromise in the situation isn’t reached soon, “it is hard to see how Morsi can stay in power for much longer. Many of his ministers have already resigned as the administration seems to be crumbling from both the outside and the inside,” said Brown Brothers Harriman currency analysts led by Marc Chandler in note earlier Tuesday.
As turmoil in Egypt grows, the ongoing civil war in Syria remains a point of concern among energy traders because of Syria’s proximity to oil-rich Iraq.
Oil prices in electronic trade late Tuesday also got a boost after a report showed U.S. crude supplies fell three times more than expected for the week ended June 28. The American Petroleum Institute said supplies fell by more than 9 million barrels, while analysts polled by Platts had expected a decline of 3 million barrels.
The more closely watched inventory report from the U.S. Energy Informational Administration was due Wednesday at 10:30 a.m. U.S. Eastern time.
In other energy trading Wednesday, August gasoline rose 4 cents, or 1.3%, to $2.82 a gallon, and August heating oil climbed 5 cents, or 1.6%, to $2.95 a gallon.
The API said gasoline inventories last week fell by 200,000 barrels, and distillate stockpiles declined by 2.3 million barrels. Analysts had expected an increase in inventory for both.
Natural gas for August delivery , however, was unchanged at $3.65 per million British thermal units. Prices climbed 2.2% on Tuesday.
Source : Marketwatch
