* Brent within 3 cents of $100, highest since October 2008
* Technicals show Brent may touch $100.50
* Investors concerned Egypt unrest may spread across region
(Adds investor comment, background on Egypt)
SINGAPORE, Jan 31 (Reuters) - Brent crude closed in on $100
a barrel on Monday on concern anti-government protests in Egypt
could spark instability elsewhere in the Middle East and North
Africa, a region that produces almost 40 percent of the world's
oil.
Six days of unrest in Egypt has killed more than 100 people,
rocked the Middle East and rattled global investors. Egypt is
not a major oil producer but protests and demands for political
change there come just two weeks after Tunisia's president was
overthrown. Concern that oil-producing states in the region may
face similar protests is supporting crude.
"The Egyptian situation looks to be the primary factor,"
said David Land, chief market analyst at CMC Markets. The market
is reacting to "what this could mean in terms of stability for
such a vital region for energy production," he added.
Brent rose as high as $99.97 a barrel, the highest
price since Oct. 1 2008, and was up 26 cents at $99.68 at 0418
GMT. Brent is trading almost $10 above U.S. crude , which
on Monday added 70 cents to trade at $90.04 a barrel.
Brent oil is expected to briefly pierce $100 per
barrel and touch $100.50, based on its wave pattern, according
to Reuters analyst Wang Tao.
Concern that unrest could impact the flow of oil through
Egypt from the Middle East to Europe underpinned price rises.
Egypt controls the Suez Canal and the Suez-Mediterranean
(SUMED) Pipeline, which between them moved over 2 million
barrels per day (bpd) of crude and oil products in 2009.
The 192-km (120-mile) Suez Canal shipping chokepoint has so
far operated as usual during the protests, with 45 to 50 ships
passing through each day, a canal official said.
"There has been a reaction to what's happened in Egypt,
there is no doubt about it. There is concern that that could
escalate into the region," said Jonathan Barratt, managing
director of Commodity Broking Services in Sydney. "It's a
knee-jerk reaction. If things escalate, then the premium is
substantiated. Only time will tell."
A recovery in world oil consumption has taken many by
surprise, led by growth in emerging economies of Asia, the
Middle East and Latin America. Production restraints by the
Organization of the Petroleum Exporting Countries have also
helped lower bloated inventories in industrialised economies.
Brent crude last traded above $100 a barrel on Oct. 1, 2008,
the only year in which any front-month oil futures benchmark
surpassed that level.
ICE Brent first touched $100 on Feb. 26, 2008, almost two
months after benchmark U.S. crude West Texas Intermediate (WTI)
futures reached triple digits on Jan. 2, 2008.
A series of production snags from Norway to Alaska in
January has benefited waterborne Brent crude over U.S. benchmark
West Texas Intermediate, a grade delivered at the landlocked
storage hub of Cushing, Oklahoma.
Oil's rally to 28-month highs has increased the pressure on
OPEC to open its taps and ease inflationary pressure for major
crude importers, like India and China.
OPEC ministers will discuss oil output policy on the
sidelines of a conference in Saudi Arabia next month, an OPEC
delegate told Reuters.
Ministers are scheduled to meet on Feb. 22 in Riyadh with
their counterparts from oil consuming nations and consumer body
the International Energy Agency at the International Energy
Forum.
Out of OPEC's 12 members, eight are in the Middle East or
North Africa: Saudi Arabia, Iran, Iraq, Kuwait, the United Arab
Emirates, Qatar, Algeria and Libya.
(Reporting by Randy Fabi, Simon Webb and Alejandro Barbajosa;
Editing by Manash Goswami)
