Oil near $100 on Egypt protests, US demand outlook

An oil pump works in the Persian Gulf desert oil fields of Sakhir, Bahrain. (AP Photo/Hasan Jamali, File)

NEW YORK — Oil nearly reached $100 a barrel for the first time this year, as traders worried about disruptions to Mideast supplies while anticipating an increase in oil demand in the U.S.

Benchmark crude for August delivery gained $1.61, or 1.6 percent, to close at $99.60 a barrel in New York after rising as high as $99.87. Oil last crossed $100 a barrel on Sept. 14 of last year.

Protests in Egypt continued as President Mohammed Morsi faced a military ultimatum that gives him until Wednesday to meet the demands of the millions who have taken to the streets seeking his ouster. Traders were concerned that the situation in Egypt, as well as and the civil war in Syria, could affect the production and transport of oil supplies in the Middle East and North Africa.

Traders are also awaiting the Energy Department’s weekly report on U.S. stockpiles of crude oil on Wednesday. Data for the week ending June 28 is expected to show a draw of 3 million barrels in crude oil stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

That would be the first decline in four weeks, and the forecast supported oil prices.

In addition, BP PLC says a new 250,000 barrel-a-day distillation unit at its refinery in Whiting, Ind., is operational. The unit will initially process light, sweet crude, which analysts expect will mean increased demand for West Texas Intermediate crude, the U.S. benchmark.

At the pump, the average U.S. price of a gallon of gas dropped another penny to $3.48, the lowest level since early February. In Houston, the average was $3.323 a gallon, down from $3.328 Monday.

In London, Brent crude rose $1 to finish at $104 a barrel on the ICE Futures exchange.

In other energy futures trading on Nymex:
— Natural gas gained 8 cents to end at $3.65 per 1,000 cubic feet.
— Heating oil added 3 cents to finish at $2.90 per gallon.
— Wholesale gasoline rose 5 cents to end at $2.78 per gallon.

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