London: North Sea Brent crude oil jumped back above $100 a barrel on Monday on worries unrest in Egypt could spread to other parts of the Middle East and north Africa, disrupting energy supplies.
A senior Kuwait official said over the weekend oil prices could exceed $110 per barrel if the turmoil in Egypt continued, while Venezuela said prices could more than double to $200 if the Suez Canal closed.
Iran, which holds the rotating presidency of the Organization of the Petroleum Exporting Countries, said it saw no need for an emergency Opec meeting even if oil prices hit $120.
“The risk of Egypt contagion to the region brings a geopolitical price premium to the markets,” said Christopher Bellew, a broker at Bache Commodities Ltd. “As long as there is uncertainty, we will certainly hold the levels and there is scope to go higher.”
He added, “Metals and currencies also play in favour of the oil prices, with the dollar weaker against the euro.”
Copper hit a record high on Monday on concerns about supply, especially from top producer Chile, and a stream of positive economic data recently boosted the outlook for industrial metals demand.
ICE Brent crude oil futures for March rose $1.07 to a high of $100.90 before slipping back to around $100.50 by 1300 GMT.
On 3 February, Brent reached an intra-day high of $103.37, its highest since September 2008.
US crude futures were more restrained as investors looked past the political crisis in Egypt to high oil inventories, particularly in Cushing, Oklahoma, the delivery point for the New York Mercantile Exchange’s crude futures contracts.
US crude for March was up 25 cents at $89.28 a barrel by 1300 GMT.
President Hosni Mubarak’s new cabinet was due on Monday to hold its first full meeting since an uprising started nearly two weeks ago, with no concrete progress in talks with Islamists and an opposition who demand his immediate exit. Mubarak, 82, has refused calls to end his 30-year-old presidency before September polls.Protesters, barricaded in a tent camp in Tahrir Square in the heart of Cairo, have vowed to stay until Mubarak quits and hope to take their campaign to the streets with more mass demonstrations on Tuesday and Friday. The banned Islamist Muslim Brotherhood movement was among the groups meeting government officials at the weekend.
Traders are worried that unrest in Tunisia and Egypt could fuel similar protests in bigger oil producers such as Libya, or even Saudi Arabia, creating uncertainty over oil supplies.
But there is no sign of a physical shortage of oil, and global stocks are high by historical standards. Domestic US crude stocks rose 2.59 million barrels to 343.16 million barrels in the week to 28 January, data from EIA showed.
Egypt controls the Suez Canal and the Suez-Mediterranean (SUMED) oil pipeline, which together moved over 2 million bpd of crude and oil products in 2009.
More than 34,000 vessels passed through the canal in 2009, of which nearly 2,700 were oil tankers carrying 29 million tonnes of oil, according to the US Energy Information Administration. Venezuelan oil minister Rafael Ramirez, who is usually hawkish on prices, said on Friday Opec would call an emergency meeting if the canal closed.
“There is sufficient oil (in the market) and there have been no interruptions, but if they close Suez, that could take the oil price to $200,” he told reporters.
Opec members will meet consumers at an energy conference in Riyadh on 22 February and are expected to talk informally about output levels.
Christopher Johnson in London and Seng Li Peng in Singapore also contributed to this story.