Brent crude advanced to its highest intraday level in more than four months as worsening violence in Egypt fanned concern that Middle East oil supplies may be disrupted. West Texas Intermediate rose for a fifth day.
Futures climbed as much as 1.2 percent in London to the highest price since April 2. Egypt, whose Suez Canal is used by tankers carrying oil from the Middle East, declared a state of emergency as more than 500 people were killed after security forces broke up sit-ins. U.S. crude inventories fell by 2.8 million barrels last week, Energy Information Administration data show, almost double the drop forecast by analysts in a Bloomberg News survey.
“Headlines of instability in Egypt, risks of spill-over to other already-unstable countries in the region and fears of a blockage in the Suez Canal, however unlikely, could lend themselves to creating fear in the oil market,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research company in London.
Brent for September settlement, which expires today, increased as much as $1.33 to $111.53 a barrel on the ICE Futures Europe exchange and was at $110.91 as of 1:08 p.m. London time. The European benchmark crude was at a premium of $3.69 to WTI. The spread was $3.35 yesterday, the widest close since July 30. The more active Brent October contract was up 73 cents at $109.55.
WTI for September delivery gained as much as $1.02 to $107.87 in electronic trading on the New York Mercantile Exchange, the highest since Aug. 2. The volume of all futures traded was 20 percent above the 100-day average. WTI’s five days of gains are its longest rising streak since April.
WTI surged 8.8 percent in July, the most since August last year, as Egypt’s army deposed Mohamed Mursi as president. Police yesterday charged into two squares in Cairo occupied by supporters weeks earlier to protest his ouster. At least 525 people died, according to official tallies.
Egypt controls the Suez Canal and the Suez-Mediterranean Pipeline, through which a combined 4.51 million barrels a day of crude and refined products were shipped between the Red Sea and the Mediterranean in 2012, according to the EIA.
The Middle East accounted for 35 percent of global oil output in the first quarter of this year, International Energy Agency data show.
Crude stockpiles in the U.S., the world’s largest oil consumer, shrank to 360.5 million in the week ended Aug. 9, the lowest since January, according to the EIA. Supplies have decreased six times in the past seven weeks.
WTI has technical support along its 30-day middle Bollinger Band, at about $105.75 a barrel today, according to data compiled by Bloomberg. Front-month futures climbed the past four days after trading near this indicator. Buy orders tend to be clustered around chart-support levels.