Chaos in Egypt Spotlights Geopolitical Risk in the Fragile Energy Market
From Fox Business
By Matt Egan
Global investors are once again setting their sights on chaos in the Middle East.
Even though Egypt is a minor player on the oil production front, the crisis-ravaged country plays a key role in the energy market because it controls two pivotal transit points: the Suez Canal and the Sumed Pipeline.
While a disruption to the free flow of oil through Egypt appears unlikely at this point, investors are clearly monitoring the latest developments in Cairo for signs the situation is spiraling any further out of control or could spread to neighboring countries.
“In addition to the human toll, the violence and political turmoil in Egypt is beginning to affect investor sentiment,” Russ Koesterich, global chief investment strategist at BlackRock (BLK), told clients in a note on Monday.
On the heels of disruptions in Libya, the Egyptian mayhem helped boost crude oil prices in six-straight sessions before cooling off this week, although gasoline prices appear to be somewhat insulated from the global-price spike.
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