Brent crude oil extended gains on Friday afternoon after the leader of a group backing the ousted Egyptian president called for his reinstatement, fueling fears of escalating conflict in the nation and spillover to elsewhere in the Middle East.
Brent crude oil for August delivery was trading $1.92 per barrel higher at $107.46 at 1:32 p.m. EDT after hitting a three-month high of $107.74 a barrel.
The leader of Egypt's Muslim Brotherhood, Mohamed Badie, told a protest rally that ousted president Mohamed Mursi must be reinstated following his removal by the army, "otherwise it's our lives."
The comments, seen in headlines around the world, fueled bullish market speculators to buy oil.
"There's enough bullish interest in owning oil that these kinds of headlines will continue to draw fresh bullish positions," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
U.S. crude oil prices maintained a 14-month high, supported by data showing U.S. employers added more jobs than expected in June, as other commodity prices sank.
Front-month U.S. crude oil futures were up $1.77 per barrel to $103.01 a barrel after hitting a high of $103.18.
Both Brent and WTI were set for their largest weekly percentage gain in more than a year.
Data released on Friday morning showing a gain in U.S. jobs pushed the U.S. dollar to a near three-year high against a basket of currencies, which can lead to lower oil prices. Commodities priced in dollars become more expensive for holders of other currencies as the dollar strengthens, weakening demand.
But the crude oil market interpreted the data as a positive, said Matt Smith, commodity analyst at Schneider Electric in Louisville, Kentucky, "because it means we're going to see a stronger economy."
Still, crude oil in other currencies is becoming more expensive and "will provide headwinds at some point," Smith added.
The positive data fueled investor fear that the U.S. Federal Reserve may pull back on its stimulus program. That, coupled with recent weaker economic data in China, caused other commodities prices to collapse.
Gold lost 3 percent and copper was down more than 2 percent.
SUPPLY TIGHTENS, MIDEAST TENSIONS WEIGH
The Egyptian military took control of the nation on Wednesday, overthrowing Egypt's first freely elected president in what his Islamist supporters are calling a military coup. Supporters of the deposed leader demonstrated in cities across the country on Friday.
So far, ports and shipping through the Suez Canal have been operating normally, two shipping sources and a canal official said.
The Middle East pumps a third of the world's oil, and the Suez Canal and Suez-Mediterranean pipeline were responsible for transporting some 2.2 million barrels per day of oil into the Mediterranean Sea in 2011, according to U.S. government data.
Libya's largest export terminal was shut late on Thursday. Port guards locked the gate over salary complaints, preventing workers from continuing operations.
Investors remained on edge and were pricing in risk of Mideast supply disruptions should conflict spread to other regional nations, analysts said.
The Egyptian uncertainty added to existing supply worries. Almost all physical crude grades consumed by Europe are now short including Russian, Iraqi, Libyan and African grades.
North Sea supplies, which underpin the Brent contract, are expected to be extremely low in the coming months when main grade Forties output is reduced due to maintenance in August.
The spread between the Brent oil contracts of August and September widened to 79 cents, the highest in nearly five months.
NONFARM PAYROLLS
Strong employment figures from the United States underpinned futures but support from the data could be short-lived.
U.S. job growth increased more than expected in June, which could draw the Federal Reserve closer to scaling back its massive monetary stimulus later this year, which would sap liquidity and drag on commodity prices.
Employers added 195,000 new jobs to their payrolls last month, the Labor Department said on Friday, while the unemployment rate held steady at 7.6 percent as more people entered the workforce.
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