SINGAPORE — Brent crude slipped from a two-week high on Thursday as the threat of a disruption in supplies from the Middle East eased after Egypt’s armed forces toppled the country’s president to force a resolution to a political crisis there.
Egypt has been facing mass demonstrations since June 30 by opposition calling for the resignation of Islamist President Mohamed Mursi and his supporters. But the Suez Canal, a key waterway for oil shipments and vital to Egypt’s struggling economy, has been unaffected by the uprising.
"There is no sign of supply disruption," Astmax Investments commodities fund manager Tetsu Emori said in Tokyo. "People are thinking about the potential effect on oil supply in the Middle East if there is turmoil in other countries."
Brent crude fell 23c to $105.53 a barrel by 5.35am GMT, after settling at its highest since June 19 on Wednesday.
US crude edged up 11c to $101.35, but was off a 14-month peak of $102.18 hit in the previous session.
"We should see prices retreat," Barratt’s Bulletin chief executive Jonathan Barratt said in Sydney. There can be more downward pressure on Brent than West Texas Intermediate (WTI) crude as receding worries about Middle East oil supply disruption could narrow the price gap between the two benchmarks, he added.
Brent’s premium to US crude hit its narrowest since December 2010 on Wednesday.
WTI crude received a boost after US weekly inventory data showed that stockpiles fell by more than 10-million barrels, the biggest drop for this time of year in nearly 13 years.
Petrol and distillates stockpiles also fell against forecasts for increases.
Traders are now waiting for the nonfarm payrolls data from the US on Friday for affirmation that recovery at the world’s largest economy is on track.
The data could also provide some indication on when the US Federal Reserve could start rolling back its bond-buying programme and tighten global liquidity.
Oil trading on the CME Group’s New York Mercantile Exchange is closed on Thursday in observance of the US Independence Day holiday.
