OIL PRICES rose 1 per cent yesterday as spreading unrest in the Middle East intensified concerns about potential threats to the region’s oil supply and UN-mandated air strikes kept flow reduced from Opec-member Libya.
The failure of both Brent and US crude prices to reach Friday’s intraday highs, the approaching expiration today of the US April crude contract and concern about oil demand in Japan as it deals with its post-earthquake nuclear reactor crisis helped pull oil down from its early peak.
Total crude trading volumes remained below average, continuing last week’s trend and underscoring the uncertainty facing the market and diminished open interest, brokers and analysts said.
Brent crude futures for May delivery rose $1.03, or 0.9 per cent, to settle at $114.96 a barrel, off its intraday peak of $116.22.
US crude futures for April delivery rose $1.26, or 1.25 per cent, to settle at $102.33 a barrel, off its high of $103.35. The April contract expires today.
Brokers noted that both front-month Brent and US crude met resistance ahead of their respective Friday intraday peaks of $117.29 and $103.66, hit before the “cease-fire” declaration by Gadafy’s government in Libya pulled prices from their intraday highs.
“The key is really how Saudi (Arabia) and Iran play out. Cool heads need to prevail. It’s contained at the moment, but if things worsen, you will see a Mideast premium very quickly,” said Jonathan Barratt, managing director of Commodity Broking Services. – (Reuters)
