WTI crude rallies to $100 a barrel
Just as we saw during the Arab Spring of 2011, oil prices are currently rising on the back of concerns that the supply from the region could be affected by the current political unrest in Egypt. While Egypt only actually produces around 700,000 barrels of oil a day, it plays a much more important role in the distribution of oil from the region. Global consumption of oil is thought to be in the region of 85 million barrels per day, while global production tends to sit at around 91 million barrels per day – which is why Egypt’s stunted production is not causing any great concerns at the moment.
However, if the distribution of Middle Eastern oil were to be affected for a sustained period of time then stockpiles would need to be tapped into across the world. Currently the United States holds around 318 million barrels of crude oil, enough to supply their nation for just over three weeks. When investors picked up on that figure they realised that the public would panic if it got into the mainstream media, driving demand for the West Texas Intermediate crude.
Since the current situation in Egypt began the Spot Price of WTI crude oil has rallied from $94.89 to its current price of $101.15. Brent crude oil is currently resting at $105.39 per barrel for August delivery.
While the Egyptian president has been removed from office by the Egyptian military has 7 PM local time tonight, the country is now under military control which is far from the Democratic result that the Egyptian people were seeking when they began their protest. So, there is a strong possibility that oil prices could continue to rise until the nations political concerns are put to rest.