* Brent hits highest since September 2008
* Mideast tension overshadows rise in U.S. inventories
* Coming Up: Euro-zone ECB rate decision; 1245 GMT
LONDON, Feb 3 (Reuters) - Brent crude rose above $103 a
barrel on Thursday after violent clashes in Egypt raised concern
of supply disruptions and unrest across the Middle East,
overshadowing ample supplies in top consumer the United States.
Supporters of President Hosni Mubarak opened fire on
protesters in Cairo's Tahrir Square on Thursday, killing at
least five, in a fresh spike in violence over an unprecedented
challenge to his 30-year-old rule. []
Brent crude for March <LCOc1> rose as much as $1.03 to
$103.37 a barrel, the highest intraday price since Sept. 26,
2008, and was up 40 cents at $102.74 at 0915 GMT. U.S. crude for
March <CLc1> rose 54 cents to $91.40.
"The chance of contagion to a country that is systemically
important for oil markets still remains relatively low, but it's
the combination of that possibility and the importance of oil
flows from the Red Sea to the Mediterranean through the Suez
Canal that is building a premium" into prices, said Ben
Westmore, commodities economist at National Australia Bank.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For all stories on the Egypt crisis, click:[]
For a graphic on Brent's growing premium over WTI:
http://r.reuters.com/guz77r
London wrenches oil trade crown from NY []
For a 4-week technical outlook for Brent: []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The crisis in Egypt has raised the prospect of disruption to
supply of Middle East oil shipped through Egypt and of unrest
spreading across the Middle East and North Africa, which
combined produce more than a third of the world's oil supplies.
In Yemen, more than 20,000 people filled the streets of
Sanaa on Thursday for a "Day of Rage" rally, demanding a change
in government and saying President Ali Abdullah Saleh's offer to
step down in 2013 was not enough. []
FLOWS NOT AFFECTED
So far, the crisis has not affected traffic on the Suez
Canal or flows on the Suez-Mediterranean (SUMED) oil pipeline.
Egypt controls both routes, which together moved over 2
million barrels per day (bpd) of crude and oil products in 2009,
the latest data available.
"Once the tensions there begin to moderate, then you will
have the market focusing again on fundamentals. We still have
this abundant supply, so there is definitely more downside than
upside," Westmore said.
U.S. crude inventories rose last week, a government report
showed on Wednesday. Stocks at Cushing, Oklahoma, the delivery
point for U.S. futures, hit a record, keeping the pressure on
the U.S. marker relative to Brent. []
U.S. crude was trading about $11.60 below Brent on Thursday.
The spread last week ballooned to a near-record $12.50 a barrel.
In other markets, European shares were lower as traders
awaited details of the European Central Bank's meeting and its
plans to fight inflation, while Royal Dutch Shell <RDSa.L> fell
after earnings lagged expectations.
Copper, a key industrial metal, hit a record high on
Thursday on expectations of strong global demand, while the
dollar was little changed against a basket of currencies.
Oil's rally has put pressure on the Organization of the
Petroleum Exporting Countries to increase output.
OPEC has maintained supply is adequate and said it has no
plan to meet before its next scheduled gathering in June.
(Reporting by Alejandro Barbajosa in Singapore and Alex Lawler
in London; editing by James Jukwey)
