Oil prices soar over Egypt fears

Egypt oil fieldFears over the impact of political unrest in Egypt have sent oil prices to their highest level in more than a year during a grim session for world markets.

Benchmark crude for August delivery rose to around 102 US dollars a barrel on the New York Mercantile Exchange, the highest level since May last year after a rise of more than two dollars a barrel overnight.
%VIRTUAL-SkimlinksPromo%Stock market investors were also spooked by disappointing data from the Chinese non-manufacturing sector and growing concerns over the future of Portugal's coalition government as it attempts to pursue the austerity measures demanded by creditors.

The FTSE 100 Index was down 1.6% or 100 points, having recovered in recent days from the sell-off triggered by credit crunch fears in China and the prospect of a tapering of economic stimulus measures in the United States.
Michael Hewson, senior market analyst at CMC Markets, said: "When talk of military intervention in Egypt is added to the mix, as well as the spectre of a resumption of political uncertainty in Europe, then you have the perfect recipe for Europe's markets to open lower."

Mohamed Morsi, who was inaugurated as Egypt's first freely-elected president a year ago, rejected an ultimatum by the army on Tuesday night that the country's leadership crisis must be resolved, pledging to protect his ''constitutional legitimacy'' with his life.

His vow not to resign came hours before a deadline to yield to the demands of millions of protesters or see the military install a new leadership.

Egypt is not an oil producer but its control of the Suez canal, one of the world's busiest shipping lanes, gives it a crucial role in global energy supplies.
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