Tags: oil | Egypt | eurozone | rises

Oil Rises on Egypt Violence, Eurozone Optimism

Friday, 23 Nov 2012 12:27 PM


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Oil rose in thin holiday trade on Friday as fresh protests in Egypt once again stoked supply concerns, with additional support coming from optimism about talks of releasing aid to Greece.

Crude prices moved higher as U.S. equity markets got a boost from hopes companies would get a boost from strong consumer buying on Black Friday, the start of the holiday shopping season.

After hostilities between Israel and Palestinians bolstered prices earlier in the week, traders were closely watching violence erupting in Egypt stirred by a decree by President Mohamed Mursi that put his decisions above legal challenge.

Protesters accused him of launching a "coup," while oil traders were once again on watch for any potential spillover that could impact Middle East oil supplies.

Markets also found support after Greece said the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. Worries about the euro zone crisis -- and the impact on struggling fuel demand -- have weighed on crude prices throughout the year.

In addition, German business sentiment surprised with a rise in November, breaking a six-month run of declines. The closely watched Munich-based Ifo think tank said its business climate index, rose to 101.4 in November, beating forecasts.

"It looks like there's some strength in the oil market today on the back of high hopes on a stronger (European Union)," said

Carl Larry, president of Oil Outlooks and Opinions LLC.

"Something that might be going unnoticed has been the consistent reports of strong retail sales today for Black Friday."

With trading quieted by players off following the U.S. Thanksgiving holiday and markets set to close early, Brent crude futures traded up 51 cents to $111.06 a barrel by 12:06 p.m. EST (1706 GMT).

U.S. crude gained 83 cents to trade at $88.21 a barrel, after briefly finding some extra support from news of a spill on Enbridge's 318,000 barrel per day Line 14 near Mokena, Illinois.

The company later said the line had been briefly shut down on Tuesday, but that it had been restarted later in the day.


Traders were also keeping a close eye on the fragile two-day truce between Israel and Palestinians, after the hostilities sent Brent prices to one-month highs earlier this week.

© 2014 Thomson/Reuters. All rights reserved.

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