29 Jan 2011

Oil prices surge on unrest in Egypt

12:36 pm on 29 January 2011

Brent oil moved towards $US100 per barrel on Friday as unrest in Egypt rattled markets. US crude surged more than 4%.

President Hosni Mubarak sent troops and armored cars onto the streets of Cairo and other Egyptian cities in an attempt to quell street fighting and mass protests demanding an end to his 30-year rule.

In an address to the nation after oil markets had closed, he said Egypt needed dialogue not violence to end problems that led to an outbreak of protests on Tuesday.

President Mubarak said he was sacking his government, adding that he would move to appoint a new government on Saturday.

In London, ICE Brent crude for March rose $US2.03 to settle at $US99.42 per barrel. It was the highest close since 26 September, 2008, after the collapse of Lehman Bros.

U.S. crude oil for March delivery rose $US3.70, or 4.3%, to settle at $US89.34 per barrel.

Stocks fell around the world and the US dollar gained on Friday as the street battles in Egypt raised concerns that the protests will intensify and spread across the Middle East.

The Dow Jones index fell 166 points, or 1.4%, to 11,823.

Despite the unrest, the Suez Canal has been operating normally over the past three days.