West Texas Intermediate crude rose for a fifth time in six days on signs of economic growth in the U.S. and Europe and amid concern than mass protests in Egypt might spread, affecting Middle Eastern oil supplies.
Prices gained as much as 1.7 percent as U.S. manufacturing rebounded last month, the Institute for Supply Management’s index showed. Euro-area manufacturing output contracted less than estimated, London-based Markit Economics said. Protesters stormed the Cairo headquarters of the Muslim Brotherhood as masses poured into Egypt’s streets demanding that President Mohamed Mursi step down.
“We are seeing signs of growth in the U.S. and it’s good for oil demand,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “We did get some strong data out of Europe. The protest in Egypt is making people concerned about oil supplies.”
WTI for August delivery advanced $1.52, or 1.6 percent to $98.08 a barrel at 10:04 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 10 percent below the 100-day average.
Brent for August settlement increased $1.43, or 1.4 percent, to $103.59 a barrel on the London-based ICE Futures Europe exchange. Volume was 17 percent below the 100-day average. The European benchmark’s premium to WTI narrowed to as little as $5.38, the least since January 2011.
Manufacturing Rebound
U.S. manufacturing rebounded last month from its largest contraction since 2009. The ISM index increased to 50.9 from 49 in May, the Tempe, Arizona-based group said today. The median forecast of 85 economists surveyed by Bloomberg called for the measure to rise to 50.5. A reading of 50 is the dividing line between expansion and contraction.
A gauge of manufacturing in the 17-nation euro area increased to 48.8 last month from 48.3 in May, Markit said. That’s above an initial estimate of 48.7 on June 20. The gauge has been below 50 since July 2011.
The U.S. and European Union used 35 percent of world’s oil in 2012, according to BP Plc (BP/)’s Statistical Review of World Energy.
Hundreds of thousands of Mursi’s opponents took to the streets nationwide yesterday in Egypt, the largest Arab nation, marking the end of the Islamist leader’s first year in office with demands that he quit.
Almost 18,000 ships transited Egypt’s Suez Canal in 2011 in both directions, of which 20 percent were petroleum tankers, according to the Energy Information Administration.
The protests come amid continuous armed conflict in Syria, raising concern that tensions may spread to larger oil-exporting nations in the Middle East, which collectively accounts for 34 percent of world oil supply.
Syria borders Iraq and is near Iran, countries that together hold almost a fifth of the production capacity of the Organization of Petroleum Exporting Countries, according to Bloomberg estimates
