Oil in London rose for a second day as civil unrest spread from Egypt to crude-producing countries in the Middle East, renewing concern supplies may be disrupted. Brent futures gained as much as 0.9 percent after demonstrators clashed with security forces in Bahrain, Yemen and Iran, the second-largest producer in the Organization of Petroleum Exporting Countries. Prices advanced 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 producers is growing, JPMorgan Chase & Co. said in a note yesterday. “Fears that civil unrest could spread into oil-producing states in the Middle East is keeping investors nervous, as they look towards the likes of Algeria,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. Brent crude for April settlement climbed as much as 96 cents, or 0.9 percent, to $104.04 a barrel and was at $103.42 at 12:13 p.m. on the ICE Futures Europe exchange in London. Yesterday it rose to $103.08, the highest settlement since September 2008. Oil for March delivery on the New York Mercantile Exchange was up 40 cents at $85.21 a barrel after rising as high as $85.40. Yesterday, it slid 0.9 percent to $84.81, the lowest since Nov. 30. Oil’s drop in New York 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 set to recover. The index was at 38.86 today. Brent Premium Brent’s gains outpaced those of New York crude, widening the difference between front-month prices to a record. The spread between the April contracts was at $14.40 a barrel today, compared with $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 rose in the week ended Jan. 28 to 38.3 million barrels, the highest since at least 2004, according to the Energy Department. TransCanada Corp. started deliveries to the storage hub on Feb. 8 in the second phase of its Keystone pipeline project. Brent has probably “over-extended” its gains and may drop, Citigroup said. Additional imports of crude from West Africa, which is priced using Brent, will also push Brent lower, Citgroup’s analyst said in a note yesterday. U.S. crude inventories nationwide probably advanced 2.5 million barrels, or 0.7 percent, in the seven days to Feb. 11 from 345.1 million a week earlier, according to the median estimate of 10 analysts surveyed by Bloomberg News. Spreading Turmoil The Energy 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. Fresh signs the anti-government demonstrations in North Africa are spreading through the Arab world have renewed concern oil supply may be 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 10 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 yesterday in Tehran to stop separate groups of demonstrators, rallying throughout the city, from converging on the central Azadi Square, al-Jazeera reported. Iran is the second-biggest OPEC producer behind Saudi Arabia and 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; Grant Smith in London at gsmith52@bloomberg.net

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