Oil in London rose for a second day as civil unrest spread from Egypt to crude-producing countries in the Middle East in Forex trading online, renewing concern supplies may be disrupted.
Brent futures gained as much as 0.9 percent after demonstrators clashed with security forces in Bahrain, Yemen and Iran, the second-largest producer in the Organization of Petroleum Exporting Countries. Prices advanced yesterday after the Egyptian army dissolved parliament and suspended the constitution following the ouster of President Hosni Mubarak. The risk of turmoil spreading to Middle East oil producers is growing, JPMorgan Chase & Co. said in a note yesterday.
Brent crude for April settlement climbed as much as 96 cents, or 0.9 percent, to $104.04 a barrel and was at $103.65 at 10:58 a.m. on the ICE Futures Europe exchange in London. Yesterday it rose to $103.08, the highest settlement since September 2008. Oil for March delivery on the New York Mercantile Exchange was up 47 cents at $85.28 a barrel after rising as high as $85.40. Yesterday, it slid 0.9 percent to $84.81, the lowest since Nov. 30.
Oil’s drop in New York pushed its 14-day relative strength index, a measure of how fast prices have risen or fallen, to 36.9 yesterday, the lowest since August, Bloomberg data show. A reading of 30 or less typically indicates a market is “oversold” and set to recover. The index was at 39.22 today.
Brent’s gains outpaced those of New York crude, widening the difference between front-month prices to a record. The spread between the April contracts was at $14.50 a barrel today, up from $14.35 yesterday. The March West Texas Intermediate contract in New York expires on Feb. 22.
West Texas crude’s discount is likely to extend as stockpiles at Cushing, Oklahoma, the contract’s delivery point, climb after the start-up of new pipeline capacity to the area. Stockpiles rose in the week ended Jan. 28 to 38.3 million barrels, the highest since at least 2004, according to the Energy Department. TransCanada Corp. started deliveries to the storage hub on Feb. 8 in the second phase of its Keystone pipeline project.