Oil above $85 amid Middle Est tensions

2011-02-17 09:41

Singapore - Oil prices hovered near $85 a barrel on Thursday in Asia on investor concern political upheaval in the Middle East could spread and disrupt crude supplies.

Benchmark crude for March delivery was up 4c at $85.03 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 67c to settle at $84.99 on Wednesday.

In London, Brent crude for April delivery gained 20c to $103.98 a barrel on the ICE Futures exchange.

Israeli Foreign Minister Avigdor Lieberman said on Wednesday that Iran was about to send two warships to Syria through the Suez Canal for the first time in years, but he offered no evidence. The Egyptian authority that runs the canal denied it.

Anti-government street protests which toppled rulers in Tunisia and Egypt this year have helped spark demonstrations in Iran, Algeria, Jordan, Bahrain and Libya. Iran is the world's fourth-largest oil producer while Algeria and Libya are also important crude suppliers.

"Repercussions from Tunisia and Egypt have yet to be felt in their entirety and we expect that in the coming months, events emanating from the Mideast will create significant volatility in the energy markets," said Richard D. Soultanian of NUS Consulting.

In other Nymex trading in March contracts, heating oil was steady at $2.77 a gallon and gasoline gained 0.3c to $2.55 a gallon. Natural gas futures were up 1.3c at $3.93 per 1 000 cubic feet.