* Brent back to $101 on Alexandria port disruption
* IEA says Egypt situation not an emergency
* Dollar falls to two-months lows against the euro
* OPEC member Libya says no need for urgent meeting
(Recasts lead, updates prices, analyst quotes, Jordan)
By Jessica Bachman
LONDON, Feb 1 (Reuters) - Oil hovered around $101 per barrel
on Tuesday after a rally on Monday supported by port disruptions
in Egypt, a weakening dollar and concerns about growing social
unrest in north Africa.
"Geo-politics is at the forefront of the sentiment at the
moment. And while we don't expect (oil) transit to be impacted,
the news of the port disruptions brings up the what-if?," said
Amrita Sen, oil analyst at Barclays.
Brent crude futures were up 6 cents at $101.09 a barrel as
of 1617 GMT. U.S. crude oil futures were down 74 cents at $91.46
per barrel after falling by over $1 during the day.
Shipping sources said there were major disruptions in
Egypt's Alexandria and Damietta ports, pushing Brent swiftly
past $101.
Risk-buyers were also encouraged to take long positions as
the wave of uprisings from Egypt and Tunisia spread to Jordan,
prompting the country's king to dismiss the prime minister and
cabinet. []
In Cairo at least 1 million Egyptians took to the streets to
protest with other mass anti-government rallies being staged in
other key cities. []
"The more alarming the news is from the region, the more
nervous the market is and the higher the political premium,"
said Eugen Weinberg an analyst Commerzbank's senior commodity
analyst, adding that a weaker dollar also supported higher
prices.
The dollar fell to its lowest level against the Euro on
Tuesday after the Euro zone released strong economic data.
[]
THE EGYPT "WHAT-IF"
While Egypt is a minor player on oil markets, it controls
two major transit points, the Suez canal and the Sumed pipeline
that brings oil from the Red Sea to the Mediterranean. So far
analysts and traders say supply disruptions along these routes
are unlikely.
The International Energy Agency said on Tuesday the oil
market does not face any emergency, but called on OPEC to remain
"flexible" in the event that contagion does spread and shortages
begin to show. []
The top oil official for OPEC member Libya told Reuters OPEC
does not need to meet to discuss oil policy in February because
the market is well supplied and prices of $100 are justified.
[]
The Organization of the Petroleum Exporting Countries says
it holds about 6 million barrels per day (bpd) of idle
production capacity -- equal to 7 percent of world demand --
that it could tap to fill any shortage. Most of this capacity is
held by Saudi Arabia.
"The market moves on the what-if factor, so you can't rule
it out," said Toni Machacek, an oil broker at Bache Commodities.
"But if there is a significant reduction of tensions in
Egypt we will settle back to more normal levels and go below
$100 to the upper 90-dollar range we had for the first few weeks
in the year."
The market expects the U.S. Energy Department to show high
crude inventories in data to be released on Wednesday, which
analysts said could further pressure U.S. crude futures.
According to a Reuters poll of analysts, U.S. crude
inventories likely rose 2.8 million barrels last week on higher
imports, while colder weather drew down distillate stockpiles by
1.2 million barrels
(Editing by William Hardy)
