World oil prices up as Egypt tensions mount

World oil prices rose in Asian trade Monday on fears that mounting political tensions in Egypt would disrupt supplies flowing through the Suez Canal, analysts said.

New York’s main contract, light sweet crude for March delivery, was up 16 cents at $89.50 per barrel in afternoon trade.

Brent North Sea crude for March rose 13 cents to $99.55.

“The rising prices reflect continued tension in Egypt and the possibility that there would be (supply) constraints through the Suez Canal,” said Ben Westmore, minerals and energy economist for National Australia Bank in Melbourne.

Tom Bentz of BNP Paribas said about one million barrels of oil per day pass through the Suez Canal, a key transit route for shipments from the Persian Gulf region.

“There is some nervousness about supplies and that could affect Europe more than the US,” he said.

On Sunday, Egypt’s embattled President Hosni Mubarak tasked his new prime minister with ramming through democratic reforms as thousands of protesters in central Cairo defied a military curfew to demand the veteran leader’s ouster.

His instructions to Prime Minister Ahmed Shafiq were read out on state television but had no discernible effect on protesters who vowed to continue their demonstrations until Mubarak stepped down.

Mubarak, who sacked his cabinet on Friday after a nationwide revolt, also said the new prime minister’s priority was restricting unemployment and creating new jobs.

Investors are concerned that similar demonstrations — which have also touched Tunisia, Yemen and Jordan — could spread elsewhere in the oil-rich Middle East.