Oil hovers around USD 102 in Asian trade

Posted By: Pti
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Singapore, Feb 4 (AFP) World oil prices remained highin Asian trade today, with the market under pressure from theongoing political crisis in Egypt where anti-governmentprotests have turned violent.

New York''s main futures contract, light sweet crudefor March, was up five cents to USD 90.91.

Brent North Sea crude for delivery in March advanced25 cents to USD 102.01. In overnight London trade, thecontract hit USD 103.37 at one point, its highest level sinceSeptember 26, 2008, before settling lower.

The oil market has been on edge since the massuprising in Egypt began nearly two weeks ago with demands forthe ouster of President Hosni Mubarak.

While Egypt is not a major crude producer, the countryis home to the Suez Canal, which carries about 2.4 millionbarrels daily, roughly equal to Iraq''s output.

Traders are also concerned about the widerramifications of the events in Egypt on the oil-rich butpolitically volatile Middle East.

Research house Capital Economics said oil prices werealso being buoyed by strong global energy demand.

"The bulk of the rise in oil prices over the last fewmonths reflects buoyant global demand rather than uncertaintyin the Middle East," it said in a research note.

"OPEC has plenty of spare capacity. Of course, oilprices would surely rise much further if there were anyserious disruption to production elsewhere in the region or totraffic through the Suez Canal," it added.

"But there is still no sign of this and little reasonto expect it. In particular, none of the major players in thiscrisis, and certainly not any new government trying to findits feet, would have any desire to lose the business from theCanal." (AFP)

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