Oil futures scored a gain on Thursday, for a fifth straight session to finish at their highest level in two weeks, as an increase in deadly violence in Egypt raised worries about supplies in the Middle East. But some disappointing U.S. manufacturing data hinted at weak energy demand prospects, limiting oil’s price gains. Crude oil for September delivery tacked on 48 cents, or 0.5%, to settle at $107.33 a barrel on the New York Mercantile Exchange. That was the highest close for a most-active contract since Aug. Prices gained more than 3% over the past four trading sessions.
The surge in oil prices “will continue as the Muslim Brotherhood persists in their protests against the Egyptian military,” said Jeffrey Sica, president and chief investment officer of Sica Wealth Management. “The greater the number of those killed in the conflict, the more likely the Suez Canal and [Suez-Mediterranean Pipeline] will be in play.”
While Egypt is not a major oil producer, it serves as an important hub for oil transported through the Suez Canal and the Suez-Mediterranean pipeline. In 2012, about 7% of all seaborne traded oil transited through the Suez Canal, the U.S. Energy Information Administration reported. “The likelihood of more broad based involvement (especially in Turkey and Saudi Arabia) in the conflict will cause oil prices to escalate further,” said Sica, who reiterated his year-end targets of $110 for Nymex crude and $115 for Brent.