NEW YORK – Oil prices fluctuated Wednesday as investors weighed a report of growing fuel supplies in the U.S. against more scenes of unrest in Egypt.
West Texas Intermediate crude for March delivery settled 9 cents higher at $90.86 a barrel on the New York Mercantile Exchange. The contract rose as high as $91.78 and fell as low as $90.10. Brent crude gained 60 cents to settle at $102.34 on the ICE Futures Exchange in London.
Oil tankers continued to move through the Suez Canal without incident. Egypt controls the canal and a nearby pipeline, which between them carry about two million barrels of oil a day destined for customers in Europe and America. That's a small amount compared with the 87 million barrels consumed worldwide every day. But with supporters and opponents of the government battling in the streets of Cairo, PFGBest analyst Phil Flynn said investors are concerned that the turmoil could spread to nearby oil-producing countries.
Regional conflicts have shut down the canal in the past. Barclays Capital noted that the Suez was blocked for several months during the 1956 Suez Crisis. The Egyptian military also installed a blockade for eight years following the Six Day War with Israel in 1967.
"Nevertheless, the canal does not appear to be under immediate threat," Barclays analyst Helima Croft said. Closing the canal altogether would require the Egyptian military, "and I don't see that happening right now," she said.
Some investors moved out of oil contracts after the U.S. government reported a rise in oil inventories and an unexpectedly large expansion in U.S. gasoline supplies for last week. A cold snap throughout much of the U.S. convinced many drivers to stay home, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
The Energy Information Administration said Wednesday that gasoline stocks grew to the highest level since March 1993. Crude oil supplies also increased for the third straight week. The U.S. is sitting on 343.2 million barrels of crude and 236.2 million barrels of gasoline.
Gasoline prices around the country increased less than a penny overnight to a national average of $3.108 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 3.6 cents higher than it was a month ago, and 44.7 cents more expensive than a year ago.
In other Nymex trading for March contracts, heating oil added 2.37 cents to settle at $2.7807 per gallon. Gasoline futures fell 2.09 cents to settle at $2.4985 per gallon and natural gas rose 8.2 cents to settle at $4.429 per 1,000 cubic feet.
Sandy Shore in Denver, Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.