What now for oil prices? All eyes on Egypt developments
SINGAPORE - Oil prices were mixed in Asian trade Thursday as investors await fresh developments in Egypt after the army overthrew and detained president Mohamed Morsi.
Investors are closely watching whether the latest unrest will escalate and affect stability in the oil-rich and politically volatile Middle East region.
New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, was up three cents at $101.27 a barrel in afternoon trade after ending Wednesday at its highest level since May last year.
Brent North Sea crude for August slipped 20 cents to $105.56.
"The gains from previous days have scaled down as the crude market seems to have priced in the transfer of power from the civil to transitional government in Egypt," David Lennox, resource analyst at Fat Prophets in Sydney, said.
"What the market will be closely watching out for now is the reaction from those previously in government, and whether that would escalate the situation."
The Egyptian army on Wednesday toppled Islamist president Morsi after a week of bloodshed that killed nearly 50 people as millions took to the streets to demand an end to his turbulent year of rule.
In a televised address, army chief Abdel Fattah al-Sisi -- who was the defence minister in Morsi's government -- said the country's Islamist-drafted constitution had been suspended, while top judicial official Adly Mansour was interim president.
Sisi also announced early presidential elections, but did not specify when they would be held.
While not a major crude exporter, Egypt is home to key oil choke points such as the Suez Canal and the Sumed Pipeline.
Lennox said prices were not likely to rise significantly from current levels unless the political unrest spreads to other countries in the region.
"The real risk as far as the market is concerned right now is if we see militaries intervening in other Middle Eastern countries as well," Lennox said.