The price of oil rose above USD 102 a barrel for the first time in 14 months on concerns about Middle East supplies and signs of an increase in US demand for fuel.
Around midday today, US benchmark oil was up USD 1.63 to USD 101.23 a barrel. It rose to USD 102.18 earlier, a high since May of last year. Oil has not closed above USD 100 since May 3, 2012.
Brent crude, which is used to price oil used by many U.S. refineries to make gasoline, rose USD 1.67 to USD 105.67 a barrel in London.
The Energy Department reported today that US crude supplies fell by 10.3 million barrels from the previous week, more than three times the drop that analysts had expected.
The drop was likely the result of reduced supplies from Canada because of a temporary pipeline shutdown there, as well as increased demand from a BP refinery that restarted in Indiana. But the drop could also be an indication that U.S. demand is rising.
At the same time, traders were worried that political upheaval in Egypt could slow the flow of oil from the Middle East to world markets. Embattled Egyptian President Mohammed Morsi vowed not to resign ahead of a deadline to yield to the demands of millions of protesters.
The Egyptian military has threatened to suspend the constitution, disband parliament and install a new leadership.
On the streets, the sense that both sides are ready to escalate the dispute sharpened, with clashes between Morsi's supporters and opponents killing at least 23 people, most of them in a single incident of fighting outside Cairo University.
Egypt is not an oil producer but its control of the Suez Canal, one of the world's busiest shipping lanes, gives it a crucial role in maintaining global energy supplies.
The Middle East accounts for about a quarter of the world's crude oil output, or 23 million barrels per day.
