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Oil rises on fears of supply disruption as Egyptian turmoil continues

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(Globalpost/GlobalPost)

BANGKOK - The price of oil rose Friday, boosted by fears of a potential supply disruption as violence in Egypt continues to spiral.

Benchmark crude for September delivery rose 12 cents to US$107.45 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents to close at $107.33 per barrel on Thursday.

Brent crude, a benchmark used to price imported crude purchased by many U.S. refineries, rose 5 cents to $109.77 per barrel.

The ouster in early July of Egypt's President Mohammed Morsi has helped lift crude prices, reflecting the risk of a supply disruption from the country that controls the Suez Canal. Violence erupted Wednesday as clashes between police and Morsi's supporters killed more than 600 people.

Egypt is not a major oil exporter, but traders worry that the violence could spill over to more important oil-exporting countries or disrupt major oil transport routes that cross Egypt.

Carl Larry of Oil Outlooks and Opinions said in an email commentary that "the timing with the Middle East issues are terrible" and added that "the Suez Canal is not the main passageway for oil, but it is a life line for a lot of Middle Eastern countries to ply their trade and keep their economies from collapsing."

Oil passed $100 per barrel in early July for the first time since September as Morsi was being ousted. It reached a high for the year of $108.15 on July 19 as Libyan output fell due to strikes at oil facilities.

In other energy futures trading on Nymex:

— Heating oil fell marginally to $3.0793 a gallon.

— Wholesale gasoline rose 0.4 cents to $2.8584 a gallon.

— Natural gas rose 0.6 cent to $3.425 per 1,000 cubic feet.

(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)

http://www.globalpost.com/dispatch/news/the-canadian-press/130815/oil-rises-above-107-barrel-us-crude-supplies-fall