AFP: New York oil rebounds amid Middle East jitters

New York oil rebounds amid Middle East jitters

(AFP) – 11 hours ago

NEW YORK — Oil prices in New York sharply rebounded Thursday in volatile trade once again dominated by concerns about spreading unrest in the oil-rich Middle East.

New York's main contract, West Texas Intermediate (WTI), light sweet crude for March, surged to $86.36 a barrel, adding $1.37 from Wednesday's closing level.

In London, Brent North Sea oil for delivery in April moved in the opposite direction, losing $1.19 to settle at $102.59.

"WTI had been depressed for a long time," said Tom Bentz of BNP Paribas, adding "so we have a kind of adjustment."

The price difference between the sinking WTI and the rising Brent contracts had spread to about $20 dollars since anti-government protests erupted in Egypt in late January.

Traders bought up Brent amid worries that any disruptions to Middle East supplies would affect the main European market.

On the other hand, the WTI had fallen, weighed down by abundant crude supplies in the United States that raised concerns about weak demand.

Thursday, the trajectories switched: prices rose in New York and fell in London.

The action was accentuated by technical factors, Bentz said: the approach of the expiration of the March WTI contract, next Tuesday, prompted traders to adjust their positions.

In addition, "we've still got worries about the Middle East," the analyst said.

Demonstrations against autocratic regimes under way in the region were met with sharp clampdowns, which left three people dead in Bahrain, at least two dead in Libya and two in Yemen.

Unlike Egypt, Libya is a major crude oil producer and a member of the Organization of the Petroleum Exporting Countries cartel.

"With unrest now escalating in Bahrain, Yemen, Algeria and Libya, there is a greater concern for a disruption of oil supply as these countries are net exporters of oil -- supplying roughly four million barrels a day of oil to global markets," analysts at JPMorgan Global Commodities Research said in a client note.

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