The price of oil climbed higher above $107 a barrel today amid fears of potential supply disruptions as violence in Egypt continued to spiral.
By early afternoon in Europe, benchmark crude for September delivery was up 23 cents to $107.56 in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents to close at $107.33 per barrel on Thursday.
The ouster in early July of Egypt’s president, Mohammed Morsi, has helped lift crude prices, reflecting the risk of a supply disruption from the country that controls the Suez Canal. Clashes between police and Morsi’s supporters left 638 dead on Wednesday, and the country is bracing for more violence.
Today, thousands of Muslim Brotherhood supporters around the country defied the state of emergency declared by the government and took to the streets in response to the Islamist group’s call for a “Day of Rage” to protest the killings.
Egypt is not a major oil exporter, but traders worry that the violence could spill over to more important oil-exporting countries in the Middle East or disrupt the Suez Canal, a major trade route.
“Alarmingly, the underlying causes for the instability in the region seem to be taking a systematic character, making it less likely that the region will return to stability in the near future and increasing the chances for continued supply outages,” said a report from analysts at JBC Energy in Vienna.
Libya’s oil output has fallen sharply over the past months, while conflicts in Tunisia, Syria, Yemen and Sudan, as well as rising sectarian violence in Iraq are all clouding the region’s future, the JBC Energy report said.
Oil passed $100 per barrel in early July for the first time since September as Morsi was being ousted. It reached a high for the year of $108.15 on July 19 as Libyan output fell due to strikes at oil facilities.
October Brent crude, a benchmark used to set prices of imported crude purchased by many U.S. refineries, was up 35 cents to $109.95 a barrel on the ICE futures exchange in London.
In other energy futures trading on Nymex:
— Heating oil rose 1.27 cents to $3.0922 a gallon.
— Wholesale gasoline added 0.63 cent to $2.8608 a gallon.
— Natural gas fell 4.5 cents to $3.374 per 1,000 cubic feet.