Oil up to $91 amid Egypt protests, U.S. jobs report
Oil prices rose to near $91 a barrel Friday as traders eyed violent street clashes in Egypt and awaited a key U.S. jobs report.
By early afternoon in Europe, benchmark crude for March delivery was up 37 cents at $90.91 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 32 cents to settle at $90.54 on Thursday.
In London, Brent crude gained 42 cents to $102.18 a barrel on the ICE Futures exchange.
Oil investors have been closely watching clashes between supporters and opponents of President Hosni Mubarak in Cairo this week after the 82-year-old leader resisted protesters' calls for his immediate resignation. Shipping through Egypt's Suez Canal has not been disrupted, but investors are also concerned political instability could spread to oil rich countries in the Middle East.
"Oil prices would surely rise much further if there were any serious disruption to production elsewhere in the region or to traffic through the Suez Canal," Capital Economics analysts wrote in a report. "But there is still no sign of this and little reason to expect it."
"The bulk of the rise in oil prices over the last few months reflects buoyant global demand rather than uncertainty in the Middle East."
Others said the effect of the "fast-moving and volatile" events in Egypt was enough for now to lift prices.
"Prices will likely continue to climb higher as long as the unrest in Egypt continues to dominate the headlines," said Edward Meir at MF Global in New York. "The complex could face a rather sharp retrenchment in the event that Mubarak decides to step down, or even agrees to a transitional government to take charge."
Another bearish development would be any sign from Saudi Arabia that it is considering increasing crude output, Meir said.
Crude traders will also be eyeing the U.S. employment report for January due to be released by the Labor Department later Friday. Analysts expect a net total of 146,000 new jobs were added last month while the unemployment rate is likely to tick up to 9.5 percent from 9.4 percent in December.
Oil prices were kept in check by a stronger dollar, which makes crude more expensive for investors holding other currencies
The euro fell to $1.3622 on Friday, down sharply from the three-month high of $1.3861 struck on Wednesday, while the British pound slipped to $1.6103 from $1.6148.
Trading volume was light in Asia as markets in mainland China, Hong Kong, South Korea, Taiwan, Malaysia and Singapore were closed Friday for Lunar New Year.
In other Nymex trading in February contracts, heating oil rose 1.22 cents to $2.7796 a gallon and gasoline gained 0.69 cent to $2.5103 a gallon. Natural gas futures for March delivery were up 0.6 cent at $4.343 per 1,000 cubic feet.