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Oil prices spike amid Egypt unrest

By Haris Afzal on Saturday, January 29, 2011 with 0 comments

NEW YORK: US oil prices surged more than four percent on Friday amid unrest in Egypt and impressive US economic growth data.

New York's main contract, light sweet crude for March, soared 3.70 dollars to $89.34 a barrel, a 4.3 percent rise for the day.

Brent North Sea crude for delivery in March surged 2.03 dollars to $99.42 per barrel at the end of London trade.

"There's about one million barrels a day that flow through the Suez Canal," said Tom Bentz of BNP Paribas. "There is some nervousness about supplies and that could affect Europe more than the US."

Embattled Egyptian President Hosni Mubarak called out the army and declared a largely ignored curfew on Friday, as tens of thousands of protesters rampaged through the streets of major cities demanding his ouster.

Traders were jittery that similar pro-democracy demonstrations -- which have also touched Tunisia, Yemen and Jordan -- could spread elsewhere in the oil-rich region.

Oil prices were also pushed upward by news that the US economy grew at its fastest clip in five years in 2010.

"Oil prices rebounded... supported by strong US GDP figures that showed that the US economy expanded by 3.2 percent in the fourth quarter of 2010, raising hopes for increasing oil demand," said Sucden analyst Myrto Sokou.

"It seems that the strong US GDP data provided clear support and improved market sentiment."

Gross domestic product (GDP) growth hit 2.9 percent in 2010, reversing the 2.6 percent contraction seen the previous year in the United States, which is the world's biggest consumer of crude.

Category: Business News

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