Oil Hits $100 Bucks a Barrell
Egyptian President Hosni Mubarak overhauled his government in an attempt to defuse a popular uprising that has raised concerns about oil shipments passing through the Suez Canal or that the unrest could spread to Middle East oil producers.
The surge in Brent, which has climbed from $70 a barrel in August on rising global demand, has also stirred worries in consumer nations that a hike in fuel prices could stall a global economic recovery.
Officials from the Organization of the Petroleum Exporting Countries (OPEC) said there was no shortage of oil in the market and no need to increase production right now.
“The whole situation in the Middle East has got traders very nervous even though crude is still coming through the Suez Canal,” said Mike Zarembski, senior commodities analyst for optionsXpress in Chicago.
“If the trouble spreads to other oil-exporting countries in the region, it could push prices higher.”
Severe cold in parts of the Northern Hemisphere this winter has also underpinned oil’s recent rally. Supportive U.S. Midwest factory activity and firmer consumer spending stoked demand expectations and helped turn crude strongly positive.
”Momentum is up. Traders are buying dips on fears that things could escalate further in the Middle East and spread to other countries,” said Tom Bentz, broker at BNP Paribas Commodity Futures Inc in New York.
U.S. distillates were seen falling for the week to January 28 due to cold weather in the giant U.S. Northeast heating oil market, while an increase in imports was seen boosting U.S. crude stockpiles, according to a Reuters poll of analysts ahead of U.S. inventory data due on Tuesday and Wednesday