The West Texas Intermediate crude futures climbed above $100 a barrel during the late Asian trading session, the highest since September on concerns over the tension in Egypt’s political turmoil.
WTI crude futures jumped 2.27% to $101.80 a barrel as of 4:43am GMT, while Brent crude rose 1% to $105.20 a barrel at the same time.
Egypt’s President Mohammed Morsi rejected the use of the army forces to resolve the country’s political turmoil. The ongoing protest have raised concerns that the crises may affect the oil transported through the country , as the U.S crude futures dropped by 9.4 million barrels last week , according to reports from the American Petroleum Institute.
“Given that Mursi is rejecting the army’s demand to step down, this is going to, in my opinion, throw the country into a crisis with no clear resolution,” said Andy Lipow, the president of Lipow Oil Associates LLC in Houston. “The market reaction will be bullish due to the uncertainty of the event and of what may ultimately happen,” he added.
Egypt controls the Suez’s canal and the Suez-Mediterranean pipeline, which is important for the transportation of crude oil and petroleum products. According to the US Energy Information Administration (EIA), 2.24 million barrels of oil a day was shipped through Suez’s canal to Europe and North America in 2011. Signifying, approximately 3.2% of daily transportation of crude oil.
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