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Brent oil surges past $100 on Egypt anxiety

By Robert Gibbons

NEW YORK | Mon Jan 31, 2011 5:36pm EST

NEW YORK (Reuters) – Brent crude topped $100 a barrel for the first time since 2008 on Monday, jumping more than 1 percent on unrest in Egypt and rising demand expectations.

Egyptian President Hosni Mubarak overhauled his government in an attempt to defuse a popular uprising that has raised concerns about oil shipments passing through the Suez Canal or that the unrest could spread to Middle East oil producers.

The surge in Brent, which has climbed from $70 a barrel in August on rising global demand, has also stirred worries in consumer nations that a hike in fuel prices could stall a global economic recovery.

Officials from the Organization of the Petroleum Exporting Countries (OPEC) said there was no shortage of oil in the market and no need to increase production right now.

“The whole situation in the Middle East has got traders very nervous even though crude is still coming through the Suez Canal,” said Mike Zarembski, senior commodities analyst for optionsXpress in Chicago.

“If the trouble spreads to other oil-exporting countries in the region, it could push prices higher.”

Severe cold in parts of the Northern Hemisphere this winter has also underpinned oil’s recent rally. Supportive U.S. Midwest factory activity and firmer consumer spending stoked demand expectations and helped turn crude strongly positive.

In London, ICE Brent crude for March rose $1.59 to settle at $101.01 a barrel and reached $101.73 intraday, the highest since prices touched $103.29 on September 29, 2008.

U.S. crude oil for March delivery rose $2.85, or 3.19 percent, to settle at $92.19 a barrel, reaching $92.84 intraday, both the highest since October 2008.

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