U.S. crude oil prices jumped over the $100 a a barrel level for the first time since last September on Wednesday, driven higher by a drop in domestic inventories and worries about instability in Egypt.
The price of the U.S. benchmark crude oil — the West Texas Intermediate grade — has also been rising in recent weeks as new pipelines have eased the bottleneck of supplies in Cushing, Okla., the giant terminal where U.S. prices are set.
The price for a barrel of WTI crude for delivery in August climbed $1.64, or 1.6 percent, to $101.24 on the New York Mercantile Exchange, the highest closing price since May 3, 2012.
Many analysts said that concerns about domestic stockpiles and Egypt were overblown and temporary. U.S. stockpiles tumbled by 10.3 million barrels, but at 383.8 million barrels was still equal to 24.5 days of supply and higher than last year at this time.
Egypt produces only about 700,000 barrels a day in a global market of 91 million barrels a day, and it is a net importer, according to the International Energy Agency.
The country is more important as a transit point. Modest amounts of crude pass through Egypt’s Suez Canal, which is too small to accomodate ultra large crude tankers, and through the Suez Mediterranean Pipeline. Together they account for about 2.2 million barrels a day, the Energy Information Administration said last year.
Greg Priddy, director of global oil at the Eurasia Group, a consulting firm, said that new railroad capacity and the reversal and expansion of the Seaway pipeline, which now can carry 400,000 barrels a day of crude from Cushing to the Texas gulf coast, had eased the glut in Cushing.