Oil prices edge lower but Egypt fears temper losses

Oil prices eased on profit-taking today following last week's surge, but losses were limited by concerns that escalating violence in Egypt will disrupt supplies from the Middle East, analysts said.

 

New York's main contract, West Texas Intermediate for delivery in August, fell 11 cents to $103.03 a barrel in morning trade and Brent North Sea crude for August was down 25 cents at $107.18.

 

Last week saw WTI surge 6.5% while Brent put on 5.0%.

 

"There is a slight technical pullback going on after the recent gains," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.

 

"But Egypt pretty much remains in focus, and traders seem to have priced in a further escalation of the current unrest," he said.

 

The crisis in Egypt in the wake of last week's military coup has worried investors, who fear a disruption in supplies through the Suez Canal and the Sumed Pipeline, which together carry almost three million barrels a day.

 

The situation was exacerbated yesterday after 51 people, mostly supporters of ousted president Mohamed Morsi, were killed in a protest rally.

 

Morsi's Muslim Brotherhood immediately called for an "uprising," saying those who were killed were "massacred" by the military and police.

 

"A closure of the Suez canal and a disruption in oil supply still seems unlikely even at this stage, but there will be a dramatic spike (in oil prices) if it eventually happens," McCarthy said.