US Oil Hits 14-Month High Above $100 a Barrel
U.S. oil prices soared more than 2 percent to a 14-month high above $100 a barrel on Wednesday, following a decline in crude stockpiles and concerns that unrest in Egypt could disrupt oil supplies from the Middle East.
Crude futures rose as high as $102.18 in Asia trade, having tested the $100-mark in the New York session. By mid-day in Europe, Nymex crude was off its highs at $100.97, up 1.38 percent.
Oil prices have risen more than 5 percent so far this week. Worries about Egypt also boosted Brent crude futures, which rose more than $1 to just above $105 a barrel.
(Read More: US Oil Flirts With $100, Boosted by Egypt Turmoil)
"If the trend continues we could get a move to $108 but that's likely to be short-lived," Daryl Guppy, a technical strategist and CEO of Guppytraders.com, told CNBC Asia's "Squawk Box."
Instability in Egypt and Libya has bolstered crude oil prices amid concerns about the supply of oil from the Middle East.
Egypt's President Mohamed Morsi has rebuffed an ultimatum from the army to resolve growing opposition to his government, which comes barely two years after long-time strongman Hosni Mubarak was ousted in a wave of similar protests.
(Read More: Scenes From the Egyptian Protests)
Egypt controls the Suez Canal, which is a key transit point for oil tankers, and is why developments in Cairo are being watching closely.
According to the latest data from the U.S. Energy Information Administration, total oil flows through the Suez Canal reached almost 2.2 million barrels a day in 2011.
(Read More: What Egypt Means for Crude: Pro)
"Egypt is essential to the region, it remains the largest Arab state, it is the core and therefore what happens in Egypt has a greater importance than what happens elsewhere in the Middle East," Graeme Bannerman, a scholar at the Middle East Institute in Washington, told CNBC Asia's "The Call."
Analysts said a big decline in crude inventories in the U.S. were also putting upward pressure on oil prices.
U.S. crude inventories fell by 9.4 million barrels in the week to June 28, the American Petroleum Institute said late on Tuesday. Analysts polled by Reuters had expected a drawdown of 2.3 million barrels.
"Demand for black gold was bolstered by rising political tensions in Egypt and as data from the American Petroleum institute showed crude inventories falling by 9.4 million barrels last week," said Desmond Chua, a market analyst at CMC Markets in a note.
"The more widely watched release by the Energy Information Administration is due tonight with expectations of stockpiles falling by 2.6 million," he added.
- By CNBC's Dhara Ranasinghe; Follow her on Twitter: @DharaCNBC