By early afternoon in Europe, benchmark crude for March delivery was up 40 cents at $89.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract shot up $3.70, or 4.3 percent, to settle at $89.34 on Friday.
Amid the instability in Egypt, jittery traders have pulled money from stocks to buy oil, gold and the dollar, which are considered less risky in uncertain times.
The uprising in Egypt follows protests this month that forced out the president of Tunisia, who fled to Saudi Arabia. Anti-government protests have also rocked Lebanon and Yemen.
Even if the unrest doesn’t spread to a major oil producer in Africa or the Middle East, “the risks are still high as Egypt plays a key role in the global oil markets” because of the Suez Canal and Suez-Mediterranean pipeline which are major conduits for Persian Gulf oil to reach Europe and North America, according to Monday’s Schork Report on the energy markets.
Routes and pipelines passing through Egypt carry 2 million barrels of crude a day, said analysts at Commerzbank in Frankfurt.
In other Nymex trading in February contracts, heating oil fell 0.27 cent to $2.6875 a gallon while gasoline added 1.11 cent to $2.4457 a gallon. Natural gas futures for March delivery were up 5.1 cents at $4.374 per 1,000 cubic feet.
In London, Brent crude was down 35 cents at $99.07 a barrel on the ICE Futures exchange.
Brent traded as high as $99.97 on Monday and was seen breaking above $100 if the unrest in Egypt continued.
“This would be the first time that we would see three-digit futures crude prices since September 2008,” said a report from JBC Energy in Vienna. “In such a case, calls on OPEC to cash in on its vast level of spare capacity by officially agreeing to an increase in output allocations should gain further momentum.”
