Oil prices hovered around US$85 on investor concerns that political upheaval in the Middle East could spread and disrupt crude supplies. Benchmark crude for March delivery rose to US$85.03 on the Nymex, and Brent crude for April delivery rose to US$103.9 on the ICE Futures exchange.
Political turmoil in the Middle East has been triggered by several factors:
Israeli Foreign Minister Avigdor Lieberman allegation that Iran plans to send two warships to Syria through the Suez Canal for the first time in years, that was denied by the Egyptian authority operating the canal. Anti-government street protests which toppled rulers in Tunisia and Egypt this year have helped spark demonstrations in Iran, Algeria, Jordan, Bahrain and Libya.
An unexpected fall in US crude oil stockpiles suggests improvement in demand, propping up oil prices to near US$85. Benchmark crude for March delivery inched up to US$84.6 on the Nymex, while in London, Brent crude for April delivery rose to US$101.9 on the ICE Futures exchange.
The American Petroleum Institute reported that crude inventories fell 354,000 barrels last week, inventories of gasoline rose 1.2 mln barrels and distillates dropped 1.2 mln barrels.