Business

Oil edges up as traders eye Cairo clashes

Oil prices hovered at 28-month highs Wednesday after clashes erupted between groups of anti-government demonstrators and supporters of President Hosni Mubarak in Cairo's Tahrir Square.

Oil prices hovered at 28-month highs Wednesday after clashes erupted between groups of anti-government demonstrators and supporters of President Hosni Mubarak in Cairo's Tahrir Square.

March light sweet crude closed in New York at $90.86 US, up nine cents a barrel as markets kept an eye on developments in Egypt and the U.S. Energy Department's Energy Information Administration reported U.S. crude supplies rose last week.

Oil traders on the New York Mercantile Exchange, shown on Monday. The market continued to watch events in Egypt Wednesday, as pro- and anti-government groups clashed in central Cairo. ((Bebeto Matthews/Associated Press))

Inventories were up by 2.6 million barrels to 343.2 million barrels. That was in line with what the market had expected and suggested the recovery in demand remains uneven.

Light sweet oil had come off two-year highs above $92 earlier this week as investor fears eased that chaos in Egypt could disrupt the two million barrels of crude per day that pass through the Suez Canal and an adjacent pipeline.

There's "mounting evidence that crude supplies through either the Suez Canal or SUMED pipeline are unlikely to be disrupted as a result of continued Egyptian street uprisings," Ritterbusch and Associates said in a report.

"The canal does not appear to be under immediate threat," Barclays analyst Helima Croft said. Closing the canal altogether would require the Egyptian military, "and I don't see that happening right now," she said.

In London, the European and Asian benchmark, Brent crude, was up 60 cents at $102.34 US a barrel on the ICE Futures exchange.

"The problem is not ... Egypt as an oil producer, it's Egypt as a stabilizer of this region, or as a destabilizer of this region," Jean-Louis Schilansky, head of the French Oil Industry Union told AP Television News.

"It's the fear of what can happen by contagion in other countries of this region that provokes this tension."

With files from The Associated Press

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