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Oil prices rise amid Middle East uncertainty

Last updated: 02:01 16 Feb 2011 AEDT, First published: 03:01 16 Feb 2011 AEDT

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Oil prices rose today amid mounting tensions in the Middle East.

Protesters flooded the streets in Yemen, Bahrain and Iran on Monday, inspired by the forced resignation of president Hosni Mubarak in Egypt that came last Friday following 18 days of mass protests.

The latest wave of protests deepened fears that the oil rich region will be hit by an extended period of uncertainty.

However, Mubarak’s ouster negated the risk of disruptions to oil shipments through Egypt’s Suez Canal, which has been a major support factor for crude oil futures over the past few weeks.

Traders are also looking to this week’s inventories reports from the American Petroleum Institute (API) and the US Department of Energy, which will be released later today and tomorrow respectively.

US light, sweet crude for March delivery, which is currently the most active contract on the New York Mercantile Exchange (NYMEX), rose to US$85.24/barrel, while April crude advanced to US$88.77/barrel.

March Brent Crude last traded at US$102.90/barrel on the ICE Exchange.

Oil and gas supermajors BP (LON:BP) and Shell (LON:RDSB) advanced 1% and 1.5% respectively.

Cairn Energy (LON:CNE) added 1.3% and Tullow Oil (LON:TLWE) tacked on 1%.

BG Group (LON:BG) posted a small gain.

Engineering firm Petrofac (LON:PFC) declined marginally and peer Amec (LON:AMEC) was little moved.

Heritage Oil (LON:HOIL) was the heaviest faller among the midcaps with a 4.2% loss.

Salamander Energy (LON:SMDR) dropped 1%.

Melrose Resources (LON:MRS)
and Premier Oil (LON:PMO) did better, posting small gains.

JKX Oil & gas (LON:JKX)
and Soco International (LON:SIA) held steady.

Service company Wood Group (LON:WG) dipped 3%.

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