The powderkeg in Egypt helped push Brent crude oil futures to their highest prices in more than two years as concerns mounted about difficulties exporting the commodity from the Middle East, Bloomberg reports.
The discontent with government leaders is expected to spread through additional Middle East nations as anti-government protestors staged demonstrations in the center of Cairo in opposition to Egyptian president Hosni Mubarak. Tunisia's leader was ousted last month.
"The market is rising because the situation in Egypt doesn't appear to be settling down," Michael Lynch, president of Strategic Energy & Economic Research in Winchester,Massachusetts, told the news service. "It looks like the unrest will continue and possibly spread in the surrounding region."
Shortly before 10 a.m., Brent crude futures were up 0.29 percent, a 0.30 cent increase to $102.04 per barrel. The political unrest has done its part to push prices of Brent crude futures beyond $100 per barrel this week.
"The chief reason for oil's rally through $100 is the return of the geopolitical risk premium," Christopher Bellew, senior broker at Bache Commodities in London, told the news service. "There has been a fresh inflow of speculative positions, though with stocks and spare production capacity ample, conditions don’t suggest a surge to new records."
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.