Oil hovers near $92 as traders eye Egypt protests

Oil prices hovered near $92 a barrel on Tuesday in Asia as a chaotic power struggle in Egypt threatened the key crude Suez Canal choke point.

Benchmark crude for March delivery was down 24 cents at $91.95 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.85, or 3.2 percent, to settle at $92.19 on Monday.

Opposition leaders are planning a massive street protest in Cairo on Tuesday in a bid to oust 82—year—old President Hosni Mubarak as an uprising against his 29—year rule begins its second week. Egypt’s military said Monday it would not use force on marchers and recognized “the legitimacy of the people’s demands.”

Oil has jumped about 8 percent in the last two trading sessions on fears that chaos in Egypt could disrupt the 2 million barrels of crude per day that pass through the Suez Canal and an adjacent pipeline. So far, the Suez remains open, and shipping has not been interrupted.

“The concern that the popular uprising in Egypt will impact either of these pieces of critical infrastructure has applied pressure to the price of crude,” said Richard D. Soultanian of NUS Consulting Group.

Investors are also worried violent street protests --which toppled Tunisian President Ben Ali last month {hbox}” could spread to other Middle Eastern countries.

“The force and duration of this market propellant will depend upon the shape and form of the resolution of the Egyptian uprising and whether this wave of public discontent ends with Egypt or continues to spread to neighboring countries,” Soultanian said.

In other Nymex trading in February contracts, heating oil fell 1.4 cent to $2.73 a gallon and gasoline slid 0.9 cent to $2.49 a gallon. Natural gas futures for March delivery were down 1.1 cents at $4.40 per 1,000 cubic feet.

In London, Brent crude was down 61 cents at $100.40 a barrel ICE Futures exchange.