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Oil price up on Egypt unrest

August 16, 2013

As political instability shakes Egypt, the price of oil has risen toward its highest price of the year. Analysts feared unrest in the country could eventually have an impact on important supply routes.

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Oil extracting facility Photo: Sebastian Widmann dpa +++(c) dpa - Bildfunk+++
Image: picture alliance/dpa

As violence in Egypt continued, oil became more expensive again on international markets on Friday.

Benchmark crude for September deliveries rose by 12 cents to $107.45 (80.47 euros) per barrel in electronic trading on the New York Mercantile Exchange. The contract already surged by 48 cents to close at $107.33 a day earlier.

Brent crude, a measure used to price imported crude by many US refineries, rose by 5 cents to $109.77 per barrel, reflecting market experts' concerns about the political and economic situation in Egypt.

Market repercussions

The ousting in early July of the country's president, Mohammed Morsi, had played a major role in lifting oil prices over fears of a supply disruption from the nation that controls the Suez Canal.

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While Egypt itself is not a major oil exporter, traders worried that violence in the country could spill over to more important oil-exporting nations or affect major transport routes crossing Egypt.

Oil passed the psychologically significant $100 benchmark in early July for the first time since September last year. It reached an all-year high on July 19 as Libyan output fell drastically due to strikes at a number of facilities.

hg/mz (AP, dpa)