Oil prices dip but Egypt worries provide support

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SINGAPORE – Oil prices eased on profit-taking in Asia on Friday but remain supported by concerns about turmoil in Egypt after a crackdown on protesters killed nearly 600 people nationwide, analysts said.

Investors are closely watching whether the latest unrest in Egypt will escalate and affect stability in the oil-rich and politically volatile Middle East region.

New York’s main contract, West Texas Intermediate for delivery in September, was down 12 cents at $107.21 a barrel in mid-morning trade.

Brent North Sea crude for October delivery was down 12 cents at $109.48.

Brent crude for September expired at the close of trading on Thursday 91 cents higher at $111.11, its highest finishing point since March 5.

“Crude prices are down for the short-term as investors are taking profits off the table,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.

“Investors have gotten used to the idea of the Middle East being a source for unrest and potential supply disruptions, and the risk premium on crude has been priced in,” he said.

Islamists in Egypt have called for a “Friday of anger” in Cairo after the nationwide death toll following a crackdown against supporters of ousted President Mohamed Morsi on Wednesday rose to 578, making it the country’s bloodiest day in decades.

The call raised fears of fresh violence amid renewed attacks on security forces on Thursday.

Traders are worried that the unrest could hit crude shipments through the Suez Canal and Sumed Pipeline, which provide a link between Europe and oil producers in the Gulf.

Although Egypt is not a major oil producer, the Suez canal carries about 2.5 million barrels daily, about 2.7 percent of global supply.