Oil prices lower as tension eases over Egypt


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Oil prices fell Monday as an uneasy calm settled over Egypt and concerns resurfaced about the pace of U.S. economic growth.

West Texas Intermediate crude, or WTI, for March delivery fell 30 cents to $88.73 a barrel in morning trading on the New York Mercantile Exchange. In London, Brent crude rose 3 cents to $99.86 per barrel.

The violent anti-government demonstrations in Egypt last week settled down after government officials negotiated on Sunday with opposition leaders. That eased fears of potential interruptions to crude supplies from the region.

Egypt controls the Suez Canal and a nearby pipeline that together carry about 2 million barrels of day from the Middle East to customers in Europe and America. That compares to about 87 million barrels consumed worldwide every day.

"The market seems to be developing a thick skin about the events in the Middle East in particular," Tradition Energy analyst Gene McGillian said. "I don't think there's as much of a worry about supply disruption."

Traders began looking more closely at the U.S. economy again after a mixed jobs report on Friday followed a government report showing record-high inventories at the hub in Cushing, Okla., the delivery point for benchmark WTI.

In addition, a stronger dollar deterred some trading. Since oil is priced in dollars, a stronger dollar makes it more costly for buyers who use foreign currencies.

Several analysts expect oil prices to trade in a narrow range over the next few days, moving on the day's news.

"We feel that this week will be characterized by a drift down in crude prices on days where either no new tensions arise or where political progress is perceived," JPMorgan analyst Lawrence Eagles told clients in a research note.

At the pump, the national average for regular gasoline was $3.122 a gallon on Monday, according to AAA, Wright Express and the Oil Price Information Service. That's 3.4 cents more than it was a month ago and 46.5 cents more than a year ago.

In other Nymex trading in March contracts, heating oil rose a penny to $2.7234 a gallon and gasoline futures gained 3 cents at $2.4700 a gallon. Natural gas futures fell 14 cents to $4.167 per 1,000 cubic feet.