Brent rises over two percent

Brent crude rose more than 2 percent on Monday to top $104 a barrel for the first time in 28 months on concerns about protests in the Middle East and strong crude oil imports by China. US crude prices, however, fell in volatile trading, weighed down by high stockpiles, especially at the Cushing, Oklahoma, delivery point.
After Egypt's President Hosni Mubarak stepped down last week, protests in Yemen, Iran, Algeria and Bahrain highlighted the potential for unrest to spread to other oil-producing nations. Concerns about the unrest and supply disruptions, lifted Brent crude, which is seen as more immediately vulnerable to any supply interruption. Brent crude for April delivery rose $2.14 to settle at $103.08 a barrel, having reached $104.30, the highest price since September 25, 2008.
US crude for March fell 77 cents to settle at $84.81 a barrel, having slipped to $84.58, the lowest intraday price since December 1. High inventories at Cushing, Oklahoma, have pressured US crude to close lower seven out of the last eight sessions and pushed out the spread between Brent and US crude to $14 on Monday. Brent's premium to US crude surged to a record $16.24 on Friday as the Brent March contract expired. The much narrower April-to-April spread attracted spread buyers on Monday, especially at levels below $14 a barrel, according to analysts and brokers.
"There has to be a lot of spread trading going on keeping Brent priced so high above WTI," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. Further pressure on US crude could come from weekly inventory reports due out on Tuesday and Wednesday. Analysts surveyed by Reuters forecast crude oil and gasoline inventories rose last week on an import rebound, with distillate stocks expected to have fallen.
Traders were also keeping an eye on a US government proposal to sell $500 million worth of US Strategic Petroleum Reserve crude oil was included in the White House's budget proposal sent to Congress. At $86 a barrel, that would require selling about 5.8 million barrels to raise the $500 million.