Feb. 3 -- Oil advanced for a second day in New York as protests in Egypt turned violent, prompting concern that supplies may be disrupted and unrest may spread to other parts of the Middle East.About 2.5 percent of global oil production moves through Egypt via the Suez Canal and the Suez-Mediterranean Pipeline, according to Goldman Sachs Group Inc.
"If the Egyptian situation results in the removal of the current administration quickly, then the consequences may be that other regions will follow," Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, said by telephone today. "It could create a contagion that could see the Middle Eastern premium being brought back in a big way because you do have that risk to the Suez."
The March contract gained as much as 31 cents, or 0.3 percent, to $91.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $91.16 at 11:38 a.m. in Sydney. Yesterday, it climbed 9 cents to settle at $90.86. Futures are up 18 percent the past year.
Brent crude for March settlement increased 60 cents, or 0.6 percent, to end the session at $102.34 a barrel on the London- based ICE Futures Europe exchange yesterday. It was the highest settlement price since Sept. 26, 2008.
Oil prices retreated yesterday after an Energy Department report showed that U.S. crude and gasoline supplies increased more than forecast last week. Crude inventories increased by 2.59 million barrels to 343.2 million in the week ended Jan. 28, the Energy Department said. They were forecast to climb by 2.5 million barrels, according to the median of 15 analyst estimates in a Bloomberg News survey.
There is "no real threat" to flows through the canal, Fatih Birol, chief economist at the International Energy Agency, said yesterday in a Bloomberg interview in Moscow. "We hope to see the market calm down because it is not good news for anybody in the market: consumers, producers or anybody."
Crude capped the biggest two-day rally since May on Jan. 31 on concern the unrest in North Africa will spread to crude- producing countries in the Middle East. Jordan's Prime Minister Samir Rifai resigned and King Abdullah asked Marouf Bakhit to form a new government.