* Pro-Mubarak demonstrators join fray, attack protesters
* U.S., France, Germany call for speedy Egypt transition
* U.S. crude inventories rise a third week -EIA data
* Coming up: US weekly jobless claims, 8:30 a.m. EST Thurs
(Updates with Brent crude settlement, U.S. heating oil close,
gasoline price, paragraphs 6, 12-15)
By Gene Ramos
NEW YORK, Feb 2 (Reuters) - Oil prices rose on Wednesday as
worries persisted that upheaval in Egypt could spread across
the Middle East and North Africa, source of a third of the
world's supply of crude.
In earlier trade, prices had lost some steam after the
dollar rebounded as nervous investors sought a safe haven and
as data showed U.S. crude stockpiles rose for a third straight
week.
"While the oil market wants to move lower on the bearish
(inventory) data, it can't break away from worries about
Egypt," said Phil Flynn, analyst at PFGBest Research in
Chicago.
"The latest pictures of Egyptian demonstrations becoming
violent have added to those worries," Flynn said.
U.S. March crude <CLH1> settled 9 cents higher at $90.86,
bouncing off a session low of $90.10.
ICE Brent crude for March delivery <LCOH1> ended up 60
cents at $102.34 a barrel. In earlier trade it touched $102.36,
the highest for a front-month contract since September 2008.
Brent's premium against the U.S. crude benchmark, West
Texas Intermediate, remained wide at more than $11 a barrel,
gaining from $10.97 at the close on Tuesday.
Part of Brent's strength stemmed from rising U.S. stocks at
the key storage hub in Cushing, Oklahoma, the delivery point
for oil futures traded on the New York Mercantile Exchange.
Stockpiles at the hub rose 667,000 barrels last week to a
record 38.33 million barrels, data from the U.S. Energy
Information Administration showed. []
That was a portion of the total 2.6-million-barrel increase
last week in U.S. crude inventories, the third straight week
that supplies have risen.
A massive winter storm, meanwhile, brought parts of the
U.S. Midwest to a standstill and delivered another wintry blow
to the Northeast, the biggest market for heating oil.
The U.S. March heating oil contract <HOH1> settled 2.37
cents higher at $2.7807 a gallon, the highest for a front-month
heating contract since October 2008.
Heating oil inventories fell 2.8 million barrels last week,
to 39.2 million barrels, dropping for the eighth week in a row,
the EIA reported.
Moving in the opposite direction, U.S. March gasoline
<RBH1> fell 2.09 cents to $2.4985 a gallon, dropping from a
28-month closing high on Tuesday.
Data showed gasoline inventories jumped a whopping 6.2
million barrels last week to 236.2 million barrels, the highest
level since March 1993.
TENSION IN EGYPT
Egyptian President Hosni Mubarak has said he will surrender
power in September, angering protesters who sought an immediate
end to his 30-year rule.
In sporadic skirmishes, Mubarak's supporters attacked
protesters, further muddling the already explosive situation.
The United States, France, Germany and Turkey have urged
Mubarak to carry out a speedy transition, but the president has
dug in his heels. A Foreign Ministry statement said those calls
aimed to "incite the internal situation" in Egypt.
[]
Analysts expect oil markets to head higher unless the
unrest in Egypt subsides.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For package of graphics on unrest in the Middle East and
North Africa, including a map of the Suez Canal, click:
http://r.reuters.com/nym77r
Reuters Breakingviews column: []
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"We suspect that the as yet unresolved political standoff
in Egypt will likely keep oil prices fairly well bid, at least
for the balance of the week," said Edward Meir, senior
commodities analyst at brokers MF Global.
Credit Suisse analysts agreed, saying price risks would
remain "skewed to the upside" as long as geopolitical tensions
in Egypt remained unresolved: "We expect oil prices to ease
once tensions fade due to ample global inventories."
So far, the unrest in Egypt has not affected traffic on the
Suez Canal or flows on the Suez-Mediterranean (SUMED) oil
pipeline, but shipping sources said there were major
disruptions in Egypt's Alexandria and Damietta ports due to
staff shortages and an absence of customs officials.
Egypt controls the canal and the pipeline, which together
moved over 2 million barrels per day of crude and oil products
in 2009, the latest data available.
There are fears that the citizen uprising in North Africa
could fuel similar protests in oil producers such as Libya or
even Saudi Arabia, stirring fears of a temporary disruption to
oil supplies.
(Additional reporting by Robert Gibbons in New York;
Christopher Johnson in London; Alejandro Barbajosa in
Singapore; Editing by Dale Hudson and David Gregorio)
