Oil rigs are seen in Midland, Texas May 9, 2008.
Credit: Reuters/Jessica Rinaldi
Egyptian President Hosni Mubarak overhauled his government to try to defuse a popular uprising but angry protesters rejected the changes and said he must surrender power. The Suez Canal continued to operate normally.
Prices were choppy earlier, with traders reassessing Friday's price surge after fears over contagion failed to materialize at the weekend.
OPEC Secretary General Abdullah al-Badri said the producer group would boost oil supply in the event of a real shortage, but did not expect current unrest in Egypt to affect the Suez Canal or SUMED pipeline oil flows.
Cold weather supporting heating fuel demand and supportive economic data from the United States in the form of better Midwest factory activity and firmer consumer spending also helped keep bullish price momentum intact.
In London, ICE Brent crude for March rose $1.36 to $100.78 a barrel by 12:41 p.m. EST, having reached $101.08, the highest since prices reached $103.29 on September 29, 2008.
U.S. crude oil for March delivery rose $2.20 to $91.54 a barrel, trading as high as $91.75. Analysts and brokers expect Brent's push above $100 to help U.S. crude retest resistance at the $92.58 peak from January 3.
The U.S. price strength helped narrow the near-record discount versus Brent. Brent's spread to U.S. benchmark West Texas Intermediate crude widened to more than $12 a barrel last week.
"Momentum is up. Traders are buying dips on fears that things could escalate further in the Middle East and spread to other countries," said Tom Bentz, broker at BNP Paribas Commodity Futures Inc in New York.
"Everything is still moving and there is no loss of shipping. But there are still concerns -- nothing has gone away."
CONTAGION FEAR
Egypt is not a major oil producer but protests and demands for political change there come two weeks after Tunisia's president was overthrown. Investor worries that oil-producing states in the region may face similar protests are keeping crude prices lifted.
Egypt controls the Suez Canal and the Suez-Mediterranean (SUMED) Pipeline, which between them moved over 2 million barrels per day (bpd) of crude and oil products in 2009.
Shipping has so far proceeded as normal through the 192-km (120-mile) Suez Canal shipping choke point but port operations have been slowed by the protests.
OPEC READY TO RESPOND
OPEC ministers will discuss oil output policy on the sidelines of a conference in Saudi Arabia next month, an OPEC delegate told Reuters.
Ministers are scheduled to meet on February 22 in Riyadh with counterparts from oil-consuming nations and the International Energy Agency at the International Energy Forum.
Saudi Oil Minister Ali al-Naimi believes oil markets are relatively balanced. Naimi told an industry conference on Monday that the price spike had more to do with the value of the dollar and the behavior of oil traders.
The dollar weakened against a basket of currencies, dropping 0.49 percent as euro zone inflation topped forecasts, supporting the European currency.
