Oil fell to the lowest level in a week as talks between the government and opposition leaders helped ease tensions in Egypt, reducing concern that supplies will be disrupted.
Oil dropped 1.7 percent in New York as Egyptian banks began to reopen after two weeks of unrest and the sale of Treasury bills resumed. As the unrest subsided, crude supplies at Cushing, Oklahoma, the delivery point for New York-traded futures, stood at a six-year high in an Energy Department report last week.
“It looks like the situation in Egypt is calming down,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
Crude oil for March delivery declined $1.55 to settle at $87.48 a barrel on the New York Mercantile Exchange, the lowest level since Jan. 27. Futures have fallen 5.1 percent in the past five days.
Egypt’s government pledged progress within a month toward free elections, a move intended to persuade protesters to leave Cairo’s Tahrir Square after two weeks of rallies aimed at toppling President Hosni Mubarak. (more)
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