Fin24

Oil stays above $100 a barrel

2011-02-01 10:06

Singapore - World oil prices stayed above $100 a barrel in Asian trade on Tuesday on fears the escalating turmoil in Egypt will disrupt supply flows through the strategic Suez Canal.

Prices barrelled through the psychological threshold overnight for the first time since the 2008 economic crisis as protests in Egypt demanding the removal of President Hosni Mubarak mounted.

Egypt is not a major oil producer, but is home to the vitally important Suez Canal, which carries around 2.4 million barrels of oil a day - roughly equivalent to the daily output of Iraq or Brazil.

New York's main contract, light sweet crude for March delivery, was down 22c to $91.97 per barrel.

Brent North Sea crude for delivery in March fell 57c to $100.44 after touching $101.73 overnight, the highest level since October 2008.

Prices were slipping in early Asian trade as traders cashed in their profits, said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

"One of the factors might be profit-taking since we're at 27-month highs," she said, adding that the dip might be temporary as the Egyptian political crisis dragged on.

"For Brent, we can still see more upside... If the tensions continue, it will continue to provide support for the oil prices," she said

But the ebullient gains on the crude market would eventually be capped by "many parties that are concerned that high prices might form a threat to the economic recovery," Ong said.