Oil prices rise on Egyptian unrest

By Phaedra Friend Troy

In London, the price of a barrel of Brent crude rose above the $100 dollar mark this week while crude oil on the New York Mercantile Exchange rose above $91 a barrel based on the escalating civil unrest in Egypt.

In intra-day trading on the NYMEX, the price of a barrel of crude rose above the $91 mark on concerns about the outcome of riots and protests in Egypt. Across the pond, the price of Bent crude remained above $101 a barrel in trading Tuesday.

Nonetheless, leading commodities expert Phil Flynn, an energy trader with PFG Best in Chicago, said the markets have stalled in their recent run-up.

“Today, the markets are breathing a sigh of relief,” Flynn said.

With the million man march scheduled for Tuesday in Cairo, Flynn revealed that traders were concerned that violence in Egypt could have drastically escalated.

“The concerns were that it could have been another Tiananmen Square,” he said.

Earlier in the week, Flynn advixed that the market was very concerned about the unrest spreading across other Middle Eastern countries.

While the price of oil is still trading at “extended levels,” Flynn said that “some of our worst fears have passed by today.”

While Egypt is not considered a major producer, the country is home to the Suez Canal, which connects the Mediterranean Sea with the Gulf of Suez and the Red Sea.

“We’re not talking about a huge amount of oil; the concern is that the risk to supply could disrupt other operations,” Flynn said.

Should the Suez Canal shut, oil tankers would have to transport crude around the southern tip of Africa, which would add 6,000 miles to the trip.

On the other hand, Flynn advised that “if President Mubarak did step-down, there will be a big sell-off in oil.”

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