Crude oil rose in London, headed for its fourth weekly gain, as escalating protests in Bahrain and Libya fueled concern that supplies from oil-producing nations may be disrupted. Protesters in Bahrain gathered for the funeral of two men killed by security forces, calling for democracy and the fall of the government as unrest in the Middle East spread to Libya where 20 were reported dead in clashes. Prices trimmed gains after the People’s Bank of China raised the reserve requirement ratio for domestic banks. “We suspect that the markets will be fairly well-bid heading into the weekend, as developments in the Middle East should prevent aggressive short positions from building up,” Edward Meir, senior commodity analyst at MF Global, wrote in a note today. “It will likely be Brent that will likely see the most price sensitivity in the event of a serious flare-up, as WTI still seems to be on the defensive.” Brent for April settlement rose as much as 91 cents, or 0.9 percent, to $103.50 a barrel and was at $102.94 at 10:27 a.m. on the ICE Futures Europe exchange in London. The contract has risen 1.5 percent this week, its fourth consecutive increase. Crude for March delivery on the New York Mercantile Exchange was down 48 cents at $85.88 a barrel. The contract, which expires Feb. 22, has risen 0.4 percent this week. The more active April contract was down 14 cents at $88.70 a barrel. Middle East Tensions Demonstrators in Libya, Africa’s biggest holder of crude oil reserves and ruled by Muammar Qaddafi for more than 40 years, yesterday demanded the government’s overthrow. At least 20 people were reported killed in confrontations with security forces as violence broke out during marches yesterday in five Libyan cities, according to the Associated Press, which cited an opposition website and an anti-Qaddafi activist. The past week has also seen anti-government protests in Yemen, a producer of liquefied natural gas. In Egypt, the Foreign Ministry has received and is studying a request from Iran for two military ships to pass through the Suez Canal, said Hossam Zaki, a ministry spokesman. “Two potential triggers for the next move higher would be an Israeli response to the Iranian warship movement or escalation of the situation in Libya,” Filip Petersson, commodity strategist of Stockholm-based consultants SEB Commodity Research said in a note today. Countries in the Middle East and North Africa were responsible for 36 percent of global oil production and held 61 percent of proved reserves in 2009, according to statistics compiled by BP Plc. Further Increase Possible Oil prices may increase next week as mounting Middle East tensions bolster the risk of a disruption of shipments from the region, a Bloomberg News survey showed. Twenty of 46 analysts, or 43 percent, forecast crude oil will rise through Feb. 25. Fifteen respondents, or 33 percent, predicted prices will decline and 11 estimated little change. Last week, 48 percent said futures would decrease. A glut of oil at Cushing, Oklahoma, the delivery point for the U.S. futures, has weighed on New York prices relative to Brent. The difference between April contracts in London and New York was $14.24 a barrel today, compared with $13.75 yesterday. Oil supplies at Cushing jumped to a record 38.3 million barrels in the week ended Jan. 28. Inventories were at 37.7 million in the seven days through Feb. 11, according to Energy Department data. To contact the reporter on this story: Sherry Su in London at lsu23@bloomberg.net. To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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