Oil Near 14-Month High On Egypt Unrest And Lower US Stockpiles, Central

Crude oil stayed above $101 a barrel on Thursday as the drop in US energy stockpiles suggest a recovery in demand while the ouster of Egypt’s president Mohamed Mursi sparked concerns over a possible disruption in Middle East oil supplies.

Egypt’s army removed Mursi from power and announced that new elections will be held, fanning speculation the political turmoil may interrupt flows along the Suez Canal and the Suez-Mediterranean Pipeline, a key source of oil for Europe and North America.

Although there has been no sign of supply disruption, the potential impact on oil supplies from the Middle East if there is turmoil keeps prices higher. But receding worries about disruption in the region’s supplies could determine prices to retreat.

- Crude is trading around $101.20 a barrel after rising $0.11

- Brent is trading around $105.45 a barrel after falling $0.31

In the US crude inventories fell by 10.3 million barrels last week, the most this year and more than three times the expected drop, which shows that the economy of the world’s largest oil consumer is doing good and that demand is recovering.

Gasoline inventories fell as well last week by 1.7 million barrels while refineries operate at 92.2% of capacity to meet the rising demand during the summer driving season. Distillates stockpiles, including heating oil and diesel, fell by 2.4 million barrels.

While US markets are closed for the Independence Day holiday, traders are awaiting key policy meetings by the European Central Bank and Bank of England Thursday and the non-farm payroll data from the United States on Friday.

The data could provide some indication on when the US Federal Reserve could start rolling back its bond-buying program; caution is also rising as a political crisis in Portugal revived fears about the eurozone debt crisis.

- Natural gas is trading at $3.665 per cubic feet after falling 0.68%

- Gasoline is trading at $2.8375 a gallon after falling 0.02%

- Heating oil is trading at $2.9435 a gallon after falling 0.26%