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Oil price surges on Egypt turmoil

Oil topped $100 per barrel on Monday for the first time since 2008, as traders fretted over violent unrest in Egypt that could disrupt the flow of oil through the Suez Canal on its way to the West.

London’s Brent North Sea crude for delivery in March surged as high as $100,25 per barrel in late afternoon deals — which marked the highest level since October 1 2008.

“Brent oil surged above $100 … following concerns that ongoing protests in Egypt might cause further political and economic uncertainty in Middle East with potential disruption in oil supplies — as the possible closure of the Suez Canal seems to be on the horizon,” Sucden analyst Myrto Sokou told Agence France-Presse.

Brent crude oil later stood at $100,01 per barrel, up 59 cents from Friday’s closing level.

New York’s main contract, light sweet crude for March, gained 69 cents to $90,04 a barrel.

Oil has soared beyond $100, despite earlier assurances from the Organisation of the Petroleum Exporting Countries’s (Opec) chief that the cartel stood ready to raise oil output should the Egypt crisis hinder supplies.

A sea of protesters flooded downtown Cairo on Monday, brushing aside concessions by President Hosni Mubarak and vowing to topple his regime with strikes and million-strong marches in the capital and Alexandria.

New Cabinet line-up
In what is seen as a sop to the protesters, a new Cabinet line-up was announced in which widely hated interior minister Habib al-Adly and the previous finance and culture ministers were axed.

But protesters massed in downtown Cairo vowed they would only be satisfied when Mubarak quits, and promised to step up their efforts to bring down his creaking regime.

Earlier on Monday, Opec secretary general Abdalla Salem El-Badri warned that “there could be a real shortage” of crude oil passing through the Suez.

“If we see a real shortage, we will need to act,” he told reporters on the sidelines of an oil conference in London.

However, El-Badri stressed that “the market is well supplied” with strong inventories and “demand is less than last year” at this time.

The OPEC chief added that he saw no need for an emergency production meeting ahead of the next scheduled gathering in Vienna in June.

Opec pumps about 40% of the world’s oil, with the bulk coming from member Saudi Arabia. — AFP

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