|Published:||Feb 14, 2011 7:16 PM EST|
|Updated:||Feb 14, 2011 4:16 PM EST|
The price of benchmark crude wavered between small gains and losses on Monday as unrest continued in the Middle East and China reported strong exports last month.
In recent days anti-government protests have occurred in Iran, Bahrain, Yemen and Algeria following the resignation of Egypt's President Hosni Mubarak last week. The military said it will guide Egypt through a democratic transition, but labor protests over wages and working conditions continue around the country.
Traders are concerned that the unrest could interfere with shipments of oil from OPEC countries such as Iran, analysts said. The 12-nation Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the de facto leader, supplies over a third of the world's crude.
"The entire region's production comes into question," PFGBest analyst Phil Flynn said. "The risk is still very, very high."
"The reactions that we're seeing in the markets over what's going on in the Middle East are quite startling," said Tom Bentz, an analyst at BNP Paribas Commodity Futures. "I know there's potential for problems there, but it's not like there's been one drop of lost oil from the Middle East."
China's reported that exports rose almost 38 percent in January to $150.7 billion. That's more than double the rate in December. It also had near-record imports of crude oil. China is the world's second-largest economy after the U.S. and the second-largest consumer of oil, according to the Energy Information Administration.
That demand has helped drive oil prices higher. While China's economy is robust, growing at a pace of nearly 10 percent at the end of last year, the government is worried about inflation and has taken steps to try to slow growth and rising prices. If China's economy slows, so will its demand for oil, and that could affect prices of oil and other commodities, Bentz said.
Benchmark West Texas Intermediate crude for March delivery lost 16 cents at $85.42 a barrel in midday trading on the New York Mercantile Exchange.
In London, Brent crude rose $2.84 to $103.78 a barrel on the ICE Futures exchange.
In other Nymex trading in March contracts, heating oil rose 6 cents to $2.7595 a gallon and gasoline gained 6 cents at $2.5295 a gallon. Natural gas lost 1 cent at $3.898 per 1,000 cubic feet.
At the pump, the national average for a gallon of regular gasoline was $3.126, according to AAA, Wright Express and the Oil Price Information Service. That's 3 cents higher than a month ago and 50.6 cents more than a year ago.
Alex Kennedy in Singapore, Pablo Gorondi in Hungary and Chris Kahn in New York contributed to this report.
(Copyright 2011 by The Associated Press. All Rights Reserved.)