Brent crude for March gained 31 cents on Friday to $102.07 a barrel at 12:25 a.m. ET, after touching $103.37 on Thursday, the highest intraday price since September 26 2008, and then sliding on a stronger dollar. U.S. crude rose 39 cents to $90.93.
The Obama administration is discussing with Egyptian officials the immediate resignation of President Hosni Mubarak as one of several scenarios for a transition of power, a U.S. official said.
Front-month Brent has rallied more than $7 since unrest in Egypt started 10 days ago, from about $95 a barrel on January 25. That 8 percent gain is more than a third of last year's total increase of 22 percent.
Violence has raged between pro- and anti-Mubarak demonstrators after the president declared he would resist demands to leave now and would remain in power until September.
Egypt's unrest has sent shockwaves across the Middle East and North Africa, which combined produce more than a third of the world's oil, with protests in Yemen and reforms in Jordan and Algeria after Tunisia's president was toppled last month.
"Ultimately, for the oil market, the uncertainties being introduced by the current political situation in Egypt have a far more long-term bearing," said Barclays Capital analysts Helima L. Croft and Amrita Sen.
"Overall, the threat to the oil supply and the consequences of the oil supply loss seem relatively limited in this case, despite the heightened risks of a more violent transition to the new regime," they added.
So far, the unrest in Egypt has not affected traffic on the Suez Canal or flows on the Suez-Mediterranean (SUMED) oil pipeline. Egypt controls both the canal and the pipeline, which together moved over 2 million barrels per day (bpd) of crude and oil products in 2009, the latest data available.
Oil traders also awaited data on U.S. non-farm payrolls for January due at 1330 GMT as an indication for the state of the economy and energy demand in the world's largest oil consumer.
U.S. hiring probably gathered steam in January, marking a fourth straight month of gains, but likely not enough to prevent the jobless rate from ticking up. Non-farm payrolls are expected to have increased by 145,000 jobs, but severe snow storms that blanketed large parts of the country during the survey period could result in a much lower figure.
In other markets, Japanese shares rose on Friday, lifted by news of a mega merger in the steel sector, while a rebounding dollar put a slight dent in a commodities rally that saw copper hit a record $10,000 a metric ton in the previous session.
The euro fell broadly on Thursday and could extend those losses after European Central Bank President Jean-Claude Trichet threw cold water on expectations euro zone interest rates would rise any time soon.
Oil prices on Thursday were also under pressure from data published by industry tracker Genscape showing crude inventories at Cushing, Oklahoma, the delivery point for the U.S. oil futures contract, hit a record high of almost 41 million barrels.
Rising inventories at Cushing have kept U.S. crude prices at a steep discount of about $11 a barrel to Brent..
Source: REUTERS
