Crude futures hit four-month highs on Egypt, Libya concerns
BY BEN WINKLEY and JENNY GROSS
LONDON -- Crude oil futures rose to a four-month high, as the effects of declining U.S. oil inventories, the deadly violence in Egypt and continuing uncertainty over Libyan output caused oil markets to continue a five-day rally.
Brent crude for September delivery rose 92 cents, or 0.9%, to $111.15 a barrel on ICE Futures Europe. U.S. crude-oil futures rose 74 cents, or 0.7%, to $107.37 a barrel on the New York Mercantile Exchange.
Oil was supported by geopolitics as well as the Energy Information Administration' s weekly statistics on U.S. oil inventories.
"When 200 anti-government protesters have been reportedly shot dead by police and a state of emergency is declared in a country where roughly 4.5 million barrels of oil passes through every day, there is only one way for oil prices to go," said brokerage PVM.
In Libya, oil output continues to remain lower due to protests and civil unrest.
"Libya is more of a concern for the oil markets than Egypt," said Olivier Jakob, managing director of Swiss-consultancy Petromatrix, in a note. "As long as Libya does not return to exporting crude oil it will difficult for markets to significantly weaken."
U.S. inventories have fallen steadily this summer, helping to drain a massive glut that had kept a lid on the price of Nymex crude. U.S. oil prices have risen 10.3% since the start of July. The rise has been aided by falling inventories at Cushing, Okla., the key oil hub that is also the delivery point for the Nymex contract.
The EIA said U.S. oil stockpiles fell more than expected in the week ended Aug. 9 to 2.8 million barrels. Inventories were expected to have dropped by just 1.5 million barrels, according to a survey of analysts.
Dow Jones Newswires