* Worries over potential supply disruption ease
* Focus returns to macro-economic fundamentals
* Coming Up: China inflation data; US retail sales, consumer
prices
(Updates with prices, analyst quote)
By Jennifer Tan
SINGAPORE, Feb 14 (Reuters) - U.S. oil prices rebounded on
Monday to near $86 a barrel, after sinking to a 10-week low in
the previous session, as tensions in the Middle East region
dissipated following the resignation of Egyptian President Hosni
Mubarak.
London crude prices extended their rally to near $102 a
barrel, after the March contract expired with a gain in the
previous session.
Mubarak's departure, after 18 days of mass protests,
relieved fears over potential supply disruptions and the spread
of turmoil to key oil producers in the Middle East region.
"Concerns over a potential disruption to supplies have
eased, and now that the immediate threat is out of the way, the
market will start focusing again on macroeconomic fundamentals,"
said Ben Westmore, a commodities analyst with National Australia
Bank.
U.S. crude for March delivery rose 7 cents to $85.65
a barrel by 0525 GMT, after settling $1.15 lower at $85.58 a
barrel on Friday, the lowest close in 10 weeks and down almost 4
percent on the week.
Brent crude for April delivery jumped 64
cents to $101.58 a barrel, after settling at $100.94 a barrel in
the previous session. The expired March contract rose 56 cents
to settle at $101.43 a barrel, off its $102.03 intraday peak.
The spread between the two grades was just below $16, after
settling at a record of $16.27 a barrel in the previous session.
For a graphic, click:
http://graphics.thomsonreuters.com/AS/0810/NT_111402134849.jpg
Westmore expects U.S. crude prices to hold in the mid-$80 a
barrel range this week, while Brent prices are expected to stay
in a range of $98-$102 a barrel.
"The crude market has shifted focus back to fundamentals.
WTI was anchored by record crude supplies in Cushing, while
tightness in the North Sea market provided support to Brent
prices," Mark Pervan, head of Commodity Research at ANZ Bank,
said in a research note.
Traders will scour a raft of U.S. economic data, including
retail sales and consumer prices, due this week for more cues,
as well as Chinese January inflation numbers, scheduled for
release on Tuesday.
Analysts polled by Reuters expect inflation in the world's
second-largest oil consumer to accelerate to a consensus 5.3
percent from 4.6 percent, but traders said prices may have only
risen 4.9 percent.
A stronger-than-expected reading could fuel worries that
China will have to hike interest rates more aggressively,
raising the spectre of slower growth.
Analysts warn that financial markets could remain under
pressure as uncertainty looms over the next phase of Egypt's
political transition and its potential spillover effects to the
broader Middle East.
Egypt's new military rulers dissolved parliament and
suspended the constitution on Sunday, but said they would govern
only until elections to replace ousted President Hosni Mubarak,
possibly in six months.
On the supply side, monthly reports from both the
International Energy Agency and OPEC showed higher production
from OPEC nations, but they expect global demand to keep rising.
U.S. stocks closed out their second straight week of gains
on Friday with a rally sparked by Mubarak's resignation, while
Asian stocks rose on Monday as investors greeted the same news
with relief.
With the euro weaker on Monday on renewed concerns over the
euro zone debt crisis, the dollar was steady to marginally
softer against a basket of major currencies .
(Reporting by Jennifer Tan)
