Crude on the rise over Egypt unrest

Brent crude shot over $103 today after violent clashes in Egypt raised the prospect of further unrest across the Middle East, overshadowing the bearish effect of soaring gasoline inventories in the United States, the top consumer.

ICE Brent crude for March rose by as much as $1.03 to $103.37 a barrel, the highest intraday price since 26 September 2008, and was up 88 cents at $103.22 at 0419 GMT. US crude for March rose 66 cents to $91.52.

Front-month Brent has rallied more than $8 since the unrest in Egypt started from about $95 a barrel on 25 January. That 9 per cent gain in slightly over a week is more than a third of last year's total increase of 22 per cent.

"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, Ben Westmore, commodities economist at National Australia Bank, told Reuters.

Supporters of president Hosni Mubarak opened fire today on protesters camped out in Cairo's Tahrir Square, wounding at least seven, witnesses said.

The crisis has alarmed Western governments which have regarded Mubarak as a bulwark of stability in a volatile region, and has raised the prospect of unrest spreading across the Middle East and North Africa, which combined produce more than a third of the world's oil supplies.

The appearance of Mubarak supporters on Cairo's streets and their clashes with protesters after days of relatively calm demonstrations complicated US calculations for an orderly transition of power in Egypt.