* Brent slips from $99.97, highest since October 2008
* Investors concerned Egypt unrest may spread across region
* Technicals show Brent may touch $100.50 []
(Updates throughout, adds quotes, updates prices)
By Jessica Donati
LONDON, Jan 31 (Reuters) - Brent oil prices fell back on
Monday after nearing $100 on fears unrest in Egypt could spread
across a region that produces over a third of the world's oil.
Over 100 people have been killed during six days of protests
in Egypt, helping to push Brent within 3 cents of $100 a barrel
in the early hours of trade, the highest since Oct.1, 2008.
On Monday, OPEC Secretary General Abdullah al-Badri said the
group would boost oil supply in the event of a real shortage,
but did not expect current unrest in Egypt to affect Suez canal
or the Sumed pipeline oil flows. []
U.S. crude <CLc1> dipped 12 cents to $89.22 a barrel at 1036
GMT on Monday, while Brent <LCOc1> fell back from a $99.97 a
barrel high, to trade 81 cents lower at $98.61 a barrel.
"Brent almost touched $100 and then kind of pulled back a
bit on profit taking but those are the fears that are keeping
prices well supported," said Amrita Sen, an analyst at BarCap,
adding "it really comes down to how the market interprets any
worsening of situation."
Egypt is not a major oil producer but protests and demands
for political change there come just two weeks after Tunisia's
president was overthrown. Concern that oil-producing states in
the region may face similar protests is supporting crude.
"The threat of contagion within the MENA region (Algeria,
Bahrain, Djibouti, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon,
Libya, Morocco, Oman, Palestinian territories, Qatar, Saudi
Arabia, Ethiopia, Sudan, Syria, Tunisia, United Arab Emirates
and Yemen) is what most analysts see as most worrying," said
Daniel Lacalle, senior portfolio manager at Ecofin Ltd.
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For a 24-technical outlook on Brent:
http://graphics.thomsonreuters.com/WT/20113101083932.jpg
For a feature on the Suez canal: []
For an analysis on investor risks in Egypt: []
For a FACTBOX on energy risks in Egypt: []
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Fears Egyptian unrest could curb the flow of oil through
Egypt from the Middle East to Europe also underpinned price
movements on Monday.
Egypt controls the Suez Canal and the Suez-Mediterranean
(SUMED) Pipeline, which between them moved over 2 million
barrels per day (bpd) of crude and oil products in 2009.
Shipping has so far proceeded as normal through the 192-km
(120-mile) Suez Canal shipping choke point but port operations
have slowed as protests have prevented supplies and staff from
reaching docks.
"No ships have been delayed, but there have been no
immigration or customs officials to clear security teams for
shipments for the past two days," said a senior coordinator with
a shipping firm operating in Suez, who wished not to be named.
[]
But even if the canal remained open as usual, any
escalation of violence in Egypt could provide the catalyst for
Brent oil <LCOc1> to break above $100 during Monday's session.
"Assuming that the situation in Egypt does not calm down
noticeably anytime soon, it could easily be the case that Brent
will break through the psychologically important $100 per barrel
threshold during today's trading session," the JBC Energy
Research Centre said in a report.
Brent oil <LCOc1> is expected to briefly pierce $100 per
barrel and touch $100.50, based on its wave pattern, according
to Reuters analyst Wang Tao.
Egyptian protesters were camped out in central Cairo on
Monday and vowed to stay until they had toppled President Hosni
Mubarak, whose fate appeared to hang on the military as pressure
mounted from the street and abroad.
OPEC ministers will discuss oil output policy on the
sidelines of a conference in Saudi Arabia next month, an OPEC
delegate told Reuters. []
Ministers are scheduled to meet on Feb. 22 in Riyadh with
their counterparts from oil consuming nations and consumer body
the International Energy Agency at the International Energy
Forum.
"The main driver of a strong Brent is on the physical side,
and Brent is still the best benchmark for oil traded on a global
basis," said Tetsu Emori, a fund manager at Tokyo-based Astmax
Co Ltd.
"For the very short term, the Egyptian situation is a very
important factor for oil prices. People are willing to take on
additional risk."
(With additional reporting by Alejandro Barbajosa, Randy
Fabi, Rebekah Kebede; editing by Keiron Henderson)
