Brent crude at $108 as oil prices rise on concerns over Suez Canal & Egypt

Brent oil futures are set to end the week firmly over $108 a barrel as crude oil prices for both European Brent and US WTI rise, in part over concerns that oil supplies may have some trouble making it through the Suez Canal, which is controlled by Egypt.

Latest Brent Oil Price

In London, Brent crude oil futures for August 2013 delivery was trading at $108.20 a barrel, 14:40 GMT today on the ICE Futures Exchange.

Egyptian Oil Route Concerns

Oil prices are rising despite an announcement from Egypt that political tension there is not a threat to supply lines in the country. Interim Egyptian Prime Minister Hazem el-Beblawi said today that the Suez Canal would remain open, enabling oil supplies to pass through, and that next week he would name a new Egyptian Cabinet.

Demonstrations in Cairo today by supporters of ousted president Mohammed Morsi are highlighting the instability of the political situation in Egypt, which controls the Suez Canal, a crucial transport route for oil and gas shipments from the Middle East.

“Egypt pretty much remains in focus, and traders seem to have priced in a further escalation of the current unrest,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

Meanwhile, the US government and the UN both raised concerns about Egypt’s decision to issue arrest warrants for the leader of the Muslim Brotherhood to which Mr Morsi belongs and nine senior figures of the movement.

“The only way this is going to work successfully… is if all parties are encouraged and allowed to participate and that’s why we’ve made clear that arbitrary arrests are not anything that we can support.” White House spokesman Jay Carney said.

The Brotherhood believes it is the victim of a brutal military crackdown, evoking memories of when it was suppressed under longtime autocratic leader Hosni Mubarak, who was toppled in a popular uprising in 2011.

But many of its opponents blame Islamists for the violence, and some have little sympathy for demonstrators who died, underlining how deep the fissures in Egyptian society are.

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Brent crude at $108 as oil prices rise on concerns over Suez Canal & Egypt