"Oil prices are reacting to events wherever they are. Events in Egypt have also contributed to the movement in prices," minister Mohamed bin Dhaen al-Hamli told reporters.

"The market is well supplied. The current price cannot be explained by the market fundamentals," he said on the sidelines of an oil forum in Abu Dhabi.

"The stocks are high... There are other factors affecting prices," said the UAE minister, whose country is a major member of the Organisation of the Petroleum Exporting Countries (OPEC).

Hamli said his country was currently producing between two million and 2.23 million barrels of crude per day, putting capacity at 2.8 million bpd.

Oil surged beyond $101 a barrel in Asian trading Monday on concerns over political uncertainty in the Middle East.

New York's main contract, light sweet crude for March delivery, was up eight cents at $85.66 per barrel in the afternoon.

Brent North Sea crude for delivery in April advanced 64 cents to $101.58 on its first day of trade.