Brent crude, used to price two-thirds of the world’s oil supply, rose above $100 a barrel for the first time since 2008 on growing confidence in its usefulness for tracking the global recovery in fuel demand.
North Sea Brent surged to a record premium of more than $11 a barrel over U.S. crude futures on Jan. 27 as swelling U.S. inventories weakened oil futures in New York and sent investors toward the European benchmark. Prices also increased amid concern protests in Egypt would spread to major oil-producing parts of the Middle East.
“Brent has been the star of the energy market this month, viewed as the ultimate oil benchmark because it best reflects global supply and demand,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “The mood among oil investors is upbeat, while colder weather and tightness in North Sea supplies added to positive sentiment.”
The March Brent contract on London’s ICE Futures Europe exchange advanced $1.59, or 1.6 percent, to $101.01 a barrel, the highest settlement since Sept. 26, 2008. It last traded above $100 on Oct. 1, 2008. The futures rose 6.6 percent in January, the fifth consecutive monthly increase.
Futures for March delivery on the New York Mercantile Exchange gained $2.85, or 3.2 percent, to settle at $92.19 a barrel. Nymex oil gained 0.9 percent in January. It was $8.82 a barrel cheaper than Brent crude, the narrowest spread in a week.
Production stoppages off the coast of Norway have added to Brent’s cost. OPEC said last week it considers prices to be in a “comfortable zone,” though Saudi Arabian Oil Minister Ali Al-Naimi said in Geneva today that oil prices at $70 to $80 a barrel are “appropriate.”
Royal Dutch Shell Plc, Europe’s largest oil company, said Jan. 21 that all four Brent platforms will be shut for several weeks following an accident. Statoil ASA, Norway’s biggest oil and natural gas producer, halted production on Jan. 24 at its Oseberg A, B, D and Oseberg South and East platforms in the North Sea due to a gas leak.
Worldwide oil consumption will increase by 1.4 million barrels a day, or 1.6 percent, this year to a record 89.1 million a day, driven by consumption in China and other emerging economies, according to the International Energy Agency.
The U.S., the largest consumer of crude, grew at a faster pace in the fourth quarter, driven by the biggest gain in consumer spending in four years.
Gross domestic product climbed at a 3.2 percent annual pace from October through December, Commerce Department figures showed on Jan. 28, falling short of the 3.5 percent median forecast of 85 economists surveyed by Bloomberg News.
Still, the nation’s crude-oil supplies remain above their five-year average at 340.6 million barrels, according to Energy Department data.
The Organization of Petroleum Exporting Countries would increase output if current unrest in Egypt disrupts supplies of crude from the Middle East, Secretary-General Abdalla el-Badri said in London.
“If we see a real shortage we will have to add,” he said. OPEC would act if supply was reduced by 1 million barrels a day or more, he said. OPEC, responsible for 40 percent of global oil supply, is next due to meet for a review of its production quota in June.
Opposition groups urged more Egyptians onto the streets to help unseat Hosni Mubarak as the president sought to quell unrest by appointing a new Cabinet and putting police back on duty in Cairo.
The anti-Mubarak movement, backed by former United Nations nuclear official Mohamed ElBaradei and the Muslim Brotherhood, aims to hold a 1 million-person march in the capital tomorrow to demand Mubarak’s resignation, said Mahmoud El-Said, one of the organizers. That would be the biggest demonstration in a week-long uprising that has left as many as 150 dead.
Iranian Oil Minister Masoud Mir-Kazemi said on Jan. 16 that a rise to $100 a barrel would not be sufficiently “worrisome” to trigger an emergency meeting.