Egypt unrest may push oil above $110-Kuwait official

Sun Feb 6, 2011 1:09pm GMT
 

* Oil may rise above $110/bbl over Egypt - Kuwait official

* Risk seen to Suez Canal, SUMED oil pipeline

KUWAIT, Feb 6 (Reuters) - Global oil prices could exceed $110 a barrel if political unrest in Egypt continues, a member of Kuwait's Supreme Petroleum Council said on Sunday.

Oil prices have spiked due to tension in Egypt. Brent crude LCOc1 hit $100 per barrel for the first time since 2008 on fears instability could spread through the Middle East, which together with North Africa pumps over a third of the world's oil.

"I expect oil prices to reach $110 during the first half of 2011, however, it could go above that level if Egypt's current crisis continues," Imad al-Atiqi, a member of the OPEC member's highest oil policy body, told Reuters in a telephone interview.

"A huge amount of oil passes through the Suez Canal and the country's stability is essential for the Middle East's stability, particularly Israel," he said.

Egypt is a small oil and gas exporter and the main danger of the unrest is seen as the closure of the Suez Canal or the Suez-Mediterranean (SUMED) oil pipeline which passes near Cairo.

The canal ships 1.5 million barrels per day (bpd) of crude and the pipeline carries 1 million bpd. Together they account for nearly 3 percent of daily global oil demand.   Continued...

 
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