Oil futures edge higher in electronic trading

SYDNEY (MarketWatch) — Crude-oil futures edged higher on Monday, attempting to regain some ground lost last week after news that Egypt’s president has resigned.

On Friday, Hosni Mubarak said Friday that he will step down as president of Egypt after about 30 years in power. The news sent crude-oil futures (CLH11 85.72, +0.14, +0.16%) tumbling 1.3% to $85.58 a barrel in regular trading in New York on Friday to close at its lowest level since Nov. 30.

Benchamrk Nymex futures were trading up 2 cents at $85.60 a barrel in electronic trading on Monday.

The contract has gained in recent weeks as traders worried about potential supply disruptions given Egypt’s control of the Suez Canal.

Although the news of Mubarak’s resignation after days of protests initially prompted a sell-off for oil, the situation is by no means settled in the country.

“The military, considered the backbone of the Egyptian political system, is now likely to come under considerable pressure to implement protesters’ demands for change, including amending the constitution, holding free and fair elections, and introducing other democratic reforms,” said analysts at IHS Global Insight.

“It is certainly possible, as with recent events in Tunisia, that Egyptians will keep considerable pressure on the government to put reforms in place and even possibly to dissolve the government and parliament, and possibly disband the ruling National Democratic Party,” the analysts said.

In addition, the political temperature may have dropped in Egypt, but it soared in Yemen and Bahrain on Sunday, with protesters making their own demands for political freedom, The Wall Street Journal reported.

In the currency markets, the dollar index (DXY 78.34, -0.12, -0.15%), which measures the U.S. currency against a basket of six currencies, retreated to 78.337 on Monday. The greenback traded at 78.379 in late North American trading on Friday.

A stronger dollar is negative for commodities, as it makes them more expensive to holders of other currencies, diminishing their appeal as an investment.

(Source: http://www.marketwatch.com/story/oil-futures-edge-higher-in-electronic-trading-2011-02-13?siteid=rss&rss=1)