The price of oil settled virtually unchanged on Thursday after moving in a narrow range following speculation that Egypt's president was about to step down.
Late in the day President Hosni Mubarak said he would pass his authority to his vice president but would not immediately leave office. The move means he keeps his title of president and ensures his regime will control any reform process, falling short of protester demands.
Benchmark West Texas Intermediate crude rose 2 cents to settle at $86.73 per barrel on the New York Mercantile Exchange. Prices climbed as high as $88.28 and dropped as low as $85.96 during the session. In London, Brent crude fell 88 cents to settle at $101.44 a barrel on the ICE Futures exchange.
Egypt's military announced on national television earlier in the day that it had stepped in to "safeguard the country" and assured protesters that Mubarak will meet their demands. The chief demand is that Mubarak leave office.
As protests and violence have continued in Egypt over the past 17 days, traders and investors have been worried about disruptions to oil supplies if unrest spreads through the region. Egypt is not a major oil-producing country, but it controls the Suez Canal and a nearby pipeline that together bring about 2 million barrels of day from the Middle East to customers in Europe and America. About 87 million barrels of oil are consumed worldwide every day.
As the global economy improves, demand for oil is likely to grow. On Thursday the Paris-based International Energy Agency said global oil consumption should increase in 2011, exceeding 90 million barrels a day for the first time by the last quarter of the year.
The Energy Department said Thursday that the nation's natural gas supplies fell more than analysts expected last week, shrinking by 209 billion cubic feet to 2.144 trillion cubic feet. Supplies have been dropping as homeowners turned up thermostats and utilities burned more gas to produce electricity, but not enough to drive up prices. Natural gas for March delivery fell 5.8 cents to settle at $3.986 per 1,000 cubic feet on the Nymex. It's the first time gas fell below $4 since mid-November, when the heating season was just starting for most of the country.
Meanwhile, the national average for a gallon of regular gasoline was $3.119 Thursday, according to AAA, Wright Express and the Oil Price Information Service. That's 3 cents more than a month ago and 47.8 cents more than a year ago.
In other Nymex trading in March contracts, heating oil fell 5.82 cents to settle at $2.7107 a gallon and gasoline fell 5.62 cents to settle at $2.4698 a gallon.
Alex Kennedy in Singapore and Pablo Gorondi in Hungary contributed to this report.