Brent oil price hits $103 on Egypt, traders on buy mode

3 February 2011 3 February 2011

BonTrade

Brent oil prices open today’s trading session over $103 a barrel after overnight unrest in Egypt has traders and investors back into buy mode, fearing that oil prices could rise further.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2011 delivery was trading at $103.23 a barrel, 07.35 GMT this morning on the ICE Futures Exchange.

“The latest news from Egypt triggered short covering and fresh buying from funds. So far there is no factor to prompt traders to sell. We don’t see any sellout in the market at the moment.” said Ken Hasegawa, energy desk manager at Newedge brokerage in Tokyo.

Since the outbreak of unrest in Egypt more than a week ago, Brent oil prices have risen on fears of possible oil supply disruption to the artificial waterway that links the Mediterranean and the Red seas, the Suez Canal.

“The situation introduces risks and uncertainties that are likely to be highly significant in terms of the broader political evolution of the region.” analysts at Barclays Capital said.

Brent Oil – WTI Spread

The spread in the price between Brent crude oil futures and the US benchmark WTI crude oil contract is likely to widen further because of oversupply in the US port of Cushing.

Oil prices are still bullish despite the latest weekly US data showing weak crude oil demand in America, the world’s biggest oil consumer.