The price of oil rose above $102 a barrel for the first time in 14 months on concerns about Middle East supplies and signs of an increase in US demand for fuel.
Around midday today, US benchmark oil was up $1.63 to $101.23 a barrel. It rose to $102.18 earlier, a high since May of last year. Oil has not closed above $100 since May 3, 2012. Brent crude, which is used to price oil used by many US refineries to make gasoline, rose $1.67 to $105.67 a barrel in london.
The Energy Department reported today that US crude supplies fell by 10.3 million barrels from the previous week, more than three times the drop that analysts had expected. The drop was likely the result of reduced supplies from Canada because of a temporary pipeline shutdown there, as well as increased demand from a BP refinery that restarted in Indiana. But the drop could also be an indication that US demand is rising.
At the same time, traders were worried that political upheaval in Egypt could slow the flow of oil from the Middle East to world markets. Embattled Egyptian President Mohammed Morsi vowed not to resign ahead of a deadline to yield to the demands of millions of protesters. The Egyptian military has threatened to suspend the constitution, disband parliament and install a new leadership.