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Oil rises through $US100 a barrel


Prices have rocketed to their highest in two years with speculators clocking up unprecedented trading volumes as the Egypt crisis intensifies.8.

Nevil Gibson
Tue, 01 Feb 2011

Oil prices have rocketed to their highest in two years with speculators clocking up unprecedented trading volumes as the Egypt crisis intensifies.

The Brent crude contract on the ICE futures exchange in London settled above $US100 for the first time since September 26, 2008, at the height of the global financial crisis on Wall Street.

The contract, which is a rival to the New York Mercantile Exchange’s light, sweet crude contract, settled $US1.59, or 1.6%, up at $US101.01 a barrel.

The Nymex contract for March delivery closed up $US2.85, or 3.2%, at $US92.19 a barrel, the highest settlement since October 3, 2008.

The Brent contract was spurred by fears the Suez Canal, a key oil shipping lane, could be affected by the turmoil in Egypt.

The rise in oil prices reverses a 10-day slide in two sessions. Nymex futures saw record volume on Friday, with nearly 1.5 million contracts traded as prices shot up more than 4%.

Although Egypt isn't a major oil exporter, the Suez Canal and Sumed pipeline transport roughly three million barrels a day through the country.

Thanks to the 1956 Suez crisis, which spurred the building of supertankers able to ship oil economically around the Cape of Good Hope, the canal now handles just 2.5% of the world's traded crude.

Nevertheless, it is still considered one of seven "world oil transit chokepoints" by the US Energy Department.

During the 2008 financial crisis, oil spiked to nearly $150 a barrel.
 

Nevil Gibson
Tue, 01 Feb 2011
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Oil rises through $US100 a barrel
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