Oil Hits Four-Month High as Supply Fears Reign

Reuters

NEW YORK, Aug 15 (Reuters) - Oil prices rose on both sides of the Atlantic on Thursday and Brent hit a four-month high on fears that escalating violence in Egypt could affect the Suez Canal or spread across the Middle East, where supplies already face disruptions.

Hundreds of supporters of Egypt's Muslim Brotherhood stormed a government building in Cairo on Thursday and set it ablaze, a day after the government declared a state of emergency following deadly clashes between riot police and supporters of ousted President Mohamed Mursi. Hundreds marched in Alexandria, Egypt's second-largest city.

While Egypt is not a major producer of crude oil, it is home to the strategically important Suez Canal and the Sumed pipeline. Investors fear the unrest could choke supply routes or spill over into oil-exporting neighbors.

"Disruptions at the Suez Canal are unlikely, but markets never move on what's likely. They move on fear," said Michael Hewson, an analyst at CMC Markets.

The Suez Canal and Egyptian ports were operating normally, shipping sources said on Thursday.

Front-month September Brent, which expired on Thursday, settled 91 cents higher at $111.11 a barrel, after earlier rising more than a dollar to $111.53, its highest since April 2. The more actively traded October contract rose 78 cents to $109.60.

U.S. oil rose 48 cents to settle at $107.33.


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Brent Crude Oil : $55.47/BBL 0.69%
Light Crude Oil : $52.48/BBL 0.30%
Natural Gas : $3.41/MMBtu 0.29%
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