London: Oil traded near the highest in more than two years in London as civil unrest spread in the Middle East, renewing concern crude shipments will be disrupted.
Brent futures rose as much as 0.5 per cent as pro-democracy demonstrations stretched into a third day in Bahrain, while protesters clashed with police in Yemen and Libya, the eighth-biggest oil producer in the Organisation of Petroleum Exporting Countries. Prices were also supported by signs of economic expansion in the US, the largest oil user.
"Places like Bahrain are next to Saudi Arabia and that is the real problem if anything happens there," Anthony Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo said.
"The economic numbers are looking OK in the US That's supportive for the oil market."
Brent crude for April settlement advanced as much as 52 cents to $104.30 (Dh383) a barrel and was at $103.89 a barrel at 8.44 am on the ICE Futures Europe exchange in London. The contract rose by $2.14 to $103.78, the highest close since September 25, 2008.
Gains
Crude for March delivery on the New York Mercantile Exchange was down 31 cents at $84.68 a barrel after gaining as much as 31 cents to $85.30 a barrel.
Prices rose 0.8 per cent on Wednesday to $84.99, the highest since February 11. Oil in New York is up 9.5 per cent from a year ago.
The difference between the April contracts in London and New York was at $16.20 a barrel, compared with $15.94 on Wednesday.
The March West Texas Intermediate contract in New York expires on February 22. Oil-market risk is "high and rising" amid unrest in the Arab world, JPMorgan Chase and Company said in a report. Crude gained 0.8 per cent on Wednesday after Israeli Foreign Minister Avigdor Lieberman said two Iranian gunboats were planning to move through the Suez Canal. Countries in the Middle East and North Africa were responsible for 36 per cent of global oil production and held 61 per cent of proved reserves in 2009, said BP, which publishes its BP Statistical Review of World Energy each June.
