Oil climbed for the first time in three days in New York as civil unrest spread from Egypt to crude-producing countries in the Middle East, renewing concern supplies may be disrupted. Futures gained as much as 0.6 percent after demonstrators clashed with security forces in Bahrain, Yemen and Iran, the second biggest producer in the Organization of Petroleum Exporting Countries. Prices dropped yesterday after the Egyptian army dissolved parliament and suspended the constitution following the ouster of President Hosni Mubarak. The risk of turmoil spreading to Middle East oil-producing nations is growing, JPMorgan Chase & Co. said in a note yesterday. “We’re seeing a little bit more graphic news on what’s occurring in the Middle East,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “The market is gaining support from what’s happening there.” Crude for March delivery increased as much as 48 cents to $85.29 a barrel in electronic trading on the New York Mercantile Exchange, and was at $85.12 at 1:34 p.m. Singapore time. The contract slid 0.9 percent to $84.81 yesterday, the lowest since Nov. 30. Prices are up 15 percent the past year. Oil’s slump pushed its 14-day relative strength index, a measure of how fast prices have risen or fallen, to 36.9 yesterday, the lowest since August, Bloomberg data show. A reading of 30 or less typically indicates a market is “oversold” and may increase. The index was 38.5 today. Brent crude for April settlement climbed as much as 55 cents, or 0.5 percent, to $103.63 a barrel on the ICE Futures Europe exchange in London. The contract advanced 2.1 percent yesterday to $103.08, the highest close since September 2008. Brent Premium Brent’s gains have outpaced those of New York crude, widening the difference between the front-month prices to a record last week. The spread between the April contracts was at $14.45 a barrel today, from $14.35 yesterday. The March West Texas Intermediate contract in New York expires on Feb. 22. West Texas crude’s discount is likely to extend as stockpiles at Cushing, Oklahoma, the contract’s delivery point, climb after the start up of new pipeline capacity to the area. Stockpiles at Cushing rose in the week ended Jan. 28 to the highest level since at least 2004, according to the Energy Department. TransCanada started deliveries to the hub on Feb. 8 in the second phase of its Keystone pipeline project. Total U.S. inventories probably advanced 2.5 million barrels, or 0.7 percent, in the seven days ended Feb. 11 from 345.1 million a week earlier, according to the median of 10 analyst estimates before an Energy Department report tomorrow. The department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. The industry-funded American Petroleum Institute will publish its data today. Spreading Turmoil Fresh signs the anti-government demonstrations in North Africa are spreading through the Arab world have renewed concern that crude supplies may disrupted. Prices rose to a two-year high last month on speculation the violence would interrupt flows through the Suez Canal and spread to oil-producing countries. Prices dropped 8 percent in the ten days through yesterday as the protests subsided and Mubarak ceded power to the armed forces. “The prospect of regional contagion impacting a key oil supplier appears elevated,” JPMorgan analysts led by Lawrence Eagles said in a note yesterday. “Egypt’s state of transition will be difficult, but it is the reports of simmering unrest in key oil exporter Iran as well as regular protests in Algeria, Bahrain, and Yemen that are of more direct concern to the oil market.” Bahrain Protests Thousands of security officers were deployed in Tehran yesterday to stop separate groups of demonstrators, rallying throughout the city, from converging on the central Azadi Square, al-Jazeera reported. Iran is OPEC’s second biggest crude producer behind Saudi Arabia. It pumped 3.7 million barrels a day in January, according to data compiled by Bloomberg. Yemen and Bahrain produced a combined average of 355,000 barrels a day in 2009, according to the U.S. Energy Information Administration. Bahraini riot police fired tear gas to break up protests across the island nation. Yemeni protesters announced plans for a fifth day of demonstrations after thousands gathered yesterday in Sanaa to demand President Ali Abdullah Saleh step down, clashing with police and pro-government demonstrators. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at christian.s@bloomberg.net To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net

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