Skip to comments.Oil Futures Climb as Egypt Violence Renews Some Supply Fears
Posted on 09/11/2013 7:26:14 AM PDT by BenLurkin
The violence renewed concerns about potential supply disruptions to major sea routes and pipelines in the crude-rich Middle East, where roughly a third of the world's oil is produced. Between the Suez Canal and the Suez-Mediterranean pipeline, 4.5 million barrels of crude flows through Egypt alone, or about 5% of global oil demand, according to the Energy Information Administration.
"Even though we aren't bombing Syria anytime soon, there are still a lot of issues in the Middle East that will keep a lot of that risk premium in the market," said Carl Larry, president of Oil Outlooks and Opinions.
On Tuesday evening, President Barack Obama told the American people he would pursue a diplomatic solution to the crisis in Syria and asked Congress to delay a vote on a resolution to authorize a military strike against the country, which allegedly launched a chemical-weapons attack killing more than 1,400 civilians.
Mr. Obama's shift toward diplomacy concerning Syria came as a Russian proposal that Syria hand over its chemical weapons to international authorities gained some momentum and several lawmakers said they would oppose the vote on military action.
Unrest in the Middle East has made oil prices volatile and sparked fears about the security of the crude supply in the region in recent weeks.
Turmoil in Libya has led to a sharp reduction in the country's own crude output amid strikes at its oil export terminals. On Tuesday, the Organization of the Petroleum Exporting Countries, said Saudi Arabia increased its production by 156,000 barrels a day last month. The country, along with Iraq, has made up for some of the recent losses in Libya.
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