Oil's rally ends, Brent stays above $100

Oil dropped from a two-year high as concern eased that supplies through the Suez Canal may be disrupted by unrest in Egypt. Brent crude traded at more than $100 a barrel for a second day.

Futures trimmed two-day gains after Suez Canal officials said traffic is moving normally through the main artery for more than 2.2 million barrels of oil a day. A US government report tomorrow may show stockpiles grew for a third week, according to a Bloomberg News survey.

“So far the escalating violence in Suez has seen no specific targeting of shipping facilities or passing ships,” Andrey Kryuchenkov, a London-based analyst at VTB Capital, said in a note. “We still see little threat to major producing nations, with the exception of Algeria, where we had some unrest earlier this month.”

Oil for March delivery on the New York Mercantile Exchange dropped as much as 94 cents, or 1 per cent, to $91.25 a barrel and was at $91.36 a barrel at 12.18 pm London time. Yesterday it gained to $92.19, the highest settlement since October 3, 2008. Futures rose 0.9 per cent in January. Brent for March settlement fell as much as 73 cents, or 0.7 per cent, to $100.28 a barrel on the ICE Futures Europe exchange in London. It rose to $101.73 yesterday, the highest price since September 29, 2008.