NEW YORK: Brent crude oil prices were trading above $107 per barrel for the first time in three months yesterday, underpinned by political unrest in Egypt that continued to fuel concerns of oil supply disruptions in the Middle East.
So far, ports and shipping through the Suez Canal have been operating normally, two shipping sources and a canal official said. The Middle East pumps a third of the world’s oil and the Suez Canal and Suez-Mediterranean pipeline were responsible for transiting some 2.2 million barrels per day of oil into the Mediterranean Sea in 2011, according to US government data.
US crude oil prices maintained a 14-month high, supported by data showing US employers added more jobs than expected in June, as other commodity prices sank. The news pushed the US dollar to a near three-year high against a basket of currencies, which can lead to lower oil prices.
But the crude oil market interpreted the data as a positive, said Matt Smith, commodity analyst at Schneider Electric in Louisville, Kentucky “because it means we’re going to see a stronger economy”.
Still, crude oil in other currencies is becoming more expensive and “will provide headwinds at some point,” Smith added. The positive data fuelled investor fear that the Federal Reserve may taper its stimulus programme. That coupled with recent reports of weaker economic data out of China caused other commodities prices to collapse.
Brent crude oil for August delivery was last trading $1.80 per barrel higher at $107.34 by 11:52am EDT (1552 GMT) after hitting a high of $107.40 a barrel. Front-month US crude oil futures were up $1.63 per barrel to $102.87 a barrel after hitting a high of $102.92. Reuters