Oil extends gains above $89 amid Egypt strife

[January 31, 2011]  BANGKOK (AP) -- Oil prices extended gains above $89 a barrel Monday in Asia as anti-government protests continued to rock Egypt and threatened to spread unrest across the oil-rich Middle East.

Benchmark crude for March delivery was up 33 cents at $89.67 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract shot up $3.70, or 4.3 percent, to settle at $89.34 on Friday.

Amid the instability in Egypt, jittery traders have pulled money from stocks to buy oil, gold and the dollar, which are considered less risky in uncertain times.

The uprising in Egypt follows protests this month that forced out the president of Tunisia, who fled to Saudi Arabia. Anti-government protests have also rocked Lebanon and Yemen.

Even if the unrest doesn't spread to a major oil producer in Africa or the Middle East, "the risks are still high as Egypt plays a key role in the global oil markets" because of the Suez Canal and Suez-Mediterranean pipeline which are major conduits for Persian Gulf oil to reach Europe and North America, according to Monday's Schork Report on the energy markets.

In other Nymex trading in February contracts, heating oil fell 0.1 cent to $2.69 a gallon while gasoline added 1.1 cent to $2.468 a gallon. Natural gas futures for March delivery were up 0.7 cent at $4.33 per 1,000 cubic feet.

In London, Brent crude was down 18 cents at $99.24 a barrel on the ICE Futures exchange.

[Associated Press]

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