Oil falls from two-year high on hopes for Egypt
Crude oil in New York dropped from a two-year high as concern eased that supplies through the Suez Canal may be disrupted by unrest in Egypt. Brent crude traded at more than $100 (€72) a barrel for a second day.
Futures slipped 1.5pc after canal officials said traffic is moving normally through the artery for more than 2.2 million barrels of oil a day. OPEC secretary-general Abdalla el-Badri said yesterday the producer group would increase output if the unrest interrupted transportation.
"The unrest in Egypt has had no impact on oil movements and OPEC has said that they would make up for any disruption," said Tom Bentz, a broker with BNP Paribas Commodity Futures in New York.
"We rallied strongly over the last two days and are now taking a pause. The premium is shrinking a bit."
Crude oil for March delivery fell $1.42 to settle at $90.77 a barrel on the New York Mercantile Exchange. Futures closed at $92.19 yesterday, the highest settlement since October 3, 2008. Futures are up 22pc from a year ago.
Brent oil for March settlement rose 73 cents, or 0.7pc, to end the session at $101.74 a barrel on the ICE Futures Europe exchange in London. It was the highest settlement for the European benchmark since September 26, 2008.
Futures in New York rose 3.2pc yesterday as opposition groups demanding Egyptian President Hosni Mubarak's ouster urged more people onto the streets. About 2.5pc of global oil production moves through Egypt via the Suez Canal and the adjacent Suez-Mediterranean Pipeline, according to Goldman Sachs. (Bloomberg)