US oil prices fell to a 10-week low on Friday after Egyptian President Hosni Mubarak stepped down and handed over power to the army. Mubarak's departure came after 18 days of mass protests that had raised concern about potential for supply disruptions and a spread of the turmoil to major oil producers in the region and helped push ICE Brent crude futures above $100 a barrel for the first time since 2008.
Front-month ICE Brent crude for March delivery, which expires on Friday, held on to some gains after the Mubarak departure, but Brent contracts for nearby months were lower. Brent's premium to US crude reached $16.02 a barrel as US prices fell on Egyptian developments, but that was just below the $16.09 record hit this week. But the spread between April contracts was around $12 a barrel.
US crude futures for March delivery fell $1.15 to settle at $85.58 a barrel, the lowest close in 10 weeks and off 3.89 percent on the week, the biggest weekly percentage loss since the week to November 19. March ICE Brent crude pared gains and last traded up 68 cents at $101.55 a barrel, but a settlement had not been posted yet. The more actively traded April contract fell 32 cents to $101.12 a barrel at 2:45 p.m. EST (1945 GMT).
Egypt's change of power ended 30 years of one-man rule by Mubarak, sparking jubilation on the streets and providing a cautionary tale to other regimes in the Arab world and beyond. Analysts and brokers remained cautious about the implications of Egypt's political transition for the broader region, where protesters also have called for changes in Jordan and Yemen.
"NYMEX crude futures have fallen back on the news of Mubarak stepping down. But lower prices may be temporary here as traders will again look broadly and see if protests in Egypt, which apparently are now about to end, may spark other similar movements across the Middle East," said Mark Waggoner, president at Excel Futures in Bend, Oregon.
In addition to the unrest in the region, Opec producers have been subject to calls to boost production on concerns that oil prices above $100 a barrel will stifle the global economic recovery. But so far, Opec officials have resisted calls for an emergency meeting to address high prices and output targets. Monthly reports from both the International Energy Agency and Opec this week showed higher production from the Opec nations, but expected global demand to keep rising.
US consumer sentiment rose to its highest level in eight months in early February, according to the Thomson Reuters/University of Michigan Surveys of Consumers and in a separate survey, the US economy and jobs market were seen growing more strongly in the first quarter than previously expected.
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