Business World

Thursday 23 March 2017

Oil at $100 as Egypt unrest raises fear of blocked Suez

Margot Habiby

Oil rose to the highest price in more than two years and Brent crude topped $100 a barrel as a seventh day of unrest in Egypt raised concern that supplies may be disrupted.

Oil gained as much as 3.8pc as opposition groups demanding an end to President Hosni Mubarak's rule urged more people on to the streets.

Egypt's Suez Canal, which links the Mediterranean and Red seas, is one of seven "world oil transit chokepoints", according to the US Energy Department.

"This is all Egypt," said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania. Upwards of "three to four million barrels a day could be disrupted" by a shutdown of the Suez Canal, he said. It would add 9,700 kilometres, two weeks and assorted costs to tankers' journeys from the Persian Gulf to Europe and the US, he added.

Oil for March delivery gained $3.18, or 3.6pc, to $92.52 a barrel on the New York Mercantile Exchange. Earlier, it touched $92.77, its highest level since October 7, 2008.

Brent crude for March settlement gained $2.10, or 2.1pc, to $101.52 a barrel on the ICE Futures Europe exchange in London. The contract earlier rose to $101.73, the highest price since September 29, 2008, on an intraday basis.

About 2.5pc of global oil production is shipped through Egypt via the Suez Canal and the Sumed oil pipeline, according to a Goldman Sachs Group report yesterday.

Oil also increased as consumer spending in the US, the world's biggest oil user, capped its strongest quarter in four years in December. (Bloomberg)

Irish Independent

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