Oil: Prices spike on upheaval in Egypt
U.S. crude-oil prices this week rose more than 5 percent, hitting their highest point since October 2008, as worries about disruptions in oil supplies from the Middle East reverberated through world markets, said Nidaa Bakhsh in Bloomberg.com. In New York, the price of a barrel of crude rose to $92.19, while in London, the price topped $100 a barrel for two consecutive days. Traders are concerned that ship traffic in Egypt’s Suez Canal, which carries an average of 1.8 million barrels a day, could be disrupted amid political unrest in Egypt. U.S. gasoline prices have risen 7 cents in the past month, to a national average this week of $3.11 a gallon of unleaded regular.
Supply worries might be overblown, said Steve Hargreaves in CNNMoney.com. In addition to the canal, where the movement of oil tankers remains unfettered, Middle East oil is shipped via the Sumed pipeline, which connects the Red Sea to the Mediterranean, handling up to 2 million barrels a day. Moreover, the Organization of the Petroleum Exporting Countries has indicated that it will increase production if necessary. But if unrest in Egypt spreads to other Middle Eastern nations, all bets are off.
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