Brent Climbs As Egypt Prepares For Another Day Of Conflict
After climbing to a four month high on Thursday, Brent crude oil looked poised to end the week on a high note as it neared $110. The commodity traded at $109.53 at 8:32 GMT on Monday morning as investors kept a keen eye on Egypt where unrest added fuel to worries that the nation's ongoing conflict could disrupt crude supply.
Reuters reported that the Muslim Brotherhood in Egypt has announced a day of anger in which millions will march across the nation to show their disapproval of a security crackdown which left hundreds of Islamists dead. Although Egypt does not produce oil, the Suez Canal is used to ship much of the world's crude and an interruption in operations would cause a large supply disruption.
The struggle in Egypt added to several other supply factors in the region as both Libya and Iraq dealt with their own supply concerns. Iraq is planning to carry out maintenance on its Basara oil export terminals, a process that would cut Iraqi oil exports to 500,000 barrels per day. However, in light of the current supply concerns, the nation is considering postponing the maintenance.
Protests in Libya have kept the nation's oil exports from their normal levels as several Libyan export terminals have been completely shut down. Although Libya's largest refinery, Ras Lanuf, has restarted, the nation's exports are at less than half their normal levels as several other crude oil terminals are still closed.
Speculation about the US Federal Reserve's plans to taper its stimulus spending has put some pressure on Brent prices as investors try to predict when the cut back will begin. Recent positive economic data has added to the growing belief that the central bank will start to roll in its $85 billion per month bond buying plan in September.
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