Oil firms on MidEast, North African unrest

By @ibtimes on

Oil steadied on Wednesday due to concerns that unrest in Yemen may spill over into neighboring countries in the oil rich Middle East Gulf region, while an expected increase in U.S. crude inventories capped gains prices.

Brent crude futures rose 9 cents to $115.76 a barrel at 0855 GMT (4:55 a.m. ET). Prices have risen four out of the past five sessions but fallen from the near $120 hit in late February.

U.S. crude futures inched by 8 cents to $105.05.

Volume for both contracts were moderate as high volatility in the recent weeks on the oil market has sent some investors to sidelines and others into safer havens.

In Yemen, a small oil and gas producer, opposition groups called on protesters to march on President Ali Abdullah Saleh's Sanaa palace on Friday to demand he step down, hoping to end a crisis that his allies abroad fear will benefit Islamic militants.

Seven weeks of street protests against Saleh's 32-year rule of the impoverished Arabian Peninsula state has raised alarm in

Western capitals at the prospect of a country where al Qaeda has entrenched itself falling apart.

While this transition is going on, it can only threaten oil supplies and increase uncertainty - both things that will keep oil prices strong, Christopher Bellew with Bache Commodities said.

Yemen's neighbor Saudi Arabia is the world's top oil exporter and the only OPEC member nation with enough spare capacity to compensate for supply disruptions elsewhere.

The civil unrest have been spreading across oil rich North Africa and the Middle East, such as Tunisia, Egypt and Bahrain and it has lead to shutting in bulk of Libya's oil output.

Western powers attacking Libya will end up in the dustbin of history, Muammar Gaddafi said as his troops held back poorly equipped rebel forces despite four nights of coalition air strikes.

Some lid on prices came from the United States, the world's second-largest energy consumer. Analysts expected government data to show a 1.6 million barrel increase in the week to March 18 when it is released later in the day.

Global markets were also watching a key vote on austerity measures in Portugal that could see the country's government brought down.

FTSEurofirst 300 index of top European shares opened lower then turned positive by 0943 GMT.

Euro dipped broadly against other currencies.

(Reporting by Ikuko Kurahone in London and Alejandro Barbajosa in Singapore; editing by Jason Neely)

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