BLBG: Oil Rises First Time in Six Days on Renewed Egypt Supply Concern
Oil in New York rose for the first time in six days as anti-government demonstrators planned to escalate protests in Egypt, renewing concern that crude supplies from the Middle East may be disrupted.
Futures rose as much as 0.4 percent as more protestors prepared to gather in Cairo’s Tahrir Square tomorrow. New York oil’s discount to Brent futures narrowed after an Energy Department report yesterday showed supplies at Cushing, Oklahoma, the delivery point for WTI crude, shrank last week. Prices also gained as China’s yuan neared a 17-year high against the dollar, making it cheaper for the world’s second-biggest crude consumer to purchase commodities.
“Fears of a closure in the Suez canal have abated a bit, but when it comes to a revolution in Egypt, anything is possible,” said Gordon Kwan, Hong-Kong based head of regional energy research at Mirae Asset Securities Ltd. “If you look at all the Asian currencies, they are all up against the U.S. dollar. Certainly it impacts not just oil but a whole asset class of commodities.”
The March contract rose as much as 36 cents to $87.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.02 a barrel at 1:39 p.m. Singapore time. Yesterday, it slipped 23 cents to $86.71, the lowest settlement since Jan. 27. Prices are 17 percent higher than a year earlier.
The gain in New York futures outpaced Brent crude in London, narrowing the spread to the European benchmark. The difference was $15.01 a barrel today, from $15.11 yesterday. It averaged 76 cents last year.
Brent for March settlement gained as much as 28 cents, or 0.3 percent, to $102.10 a barrel on the ICE Futures Europe exchange. The more-actively traded April contract rose 32 cents to $102.64 a barrel.
About 3.5 percent of global oil output moves through Egypt via the Suez Canal and the Suez-Mediterranean Pipeline, according to Bloomberg calculations using data from the U.S. Energy Department.
China’s yuan gained 0.08 percent to 6.5888 per dollar, near a 17-year high, as U.S. lawmakers prepared to introduce legislation aimed at pushing Asia’s largest economy to let its currency strengthen faster.
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To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net
