Egypt unrest pushes oil prices above $100

July 3, 2013: 3:42 PM ET
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NEW YORK (CNNMoney)

Oil prices topped $100 a barrel Wednesday, as traders feared the fallout from a coup in Egypt could spread to the broader Middle East.

U.S. oil prices rose as high as $102.18, the highest they've been in over a year, before settling at $101.24 a barrel, 1.7% higher.

While oil production from Egypt is negligible, the country controls the Suez Canal and pipeline, which move about 4 million barrels of oil per day.

Plus, the country is one of the largest and most powerful in the Middle East and North Africa -- home to about a third of the world's oil production.

With Egypt on the verge of a meltdown, fears of supply disruptions will likely drive oil prices higher.

"It's anyone's guess as to how high crude oil can go when crisis erupts in the Middle East," said analysts at Lido Isle Investors. "We believe this is a key breakout move and would not be surprised to see crude head higher from here."

Protesters in Egypt have been demanding the country's democratically elected Islamist president, Mohamed Morsy, step down, saying he has not governed the country in an inclusive manor. On Wednesday evening, the Egyptian military said Morsy was no longer president.

Egypt's military deposed the country's first democratically elected president, installing the head of the country's highest court as an interim leader, the country's top general announced.

The protests are the largest the county has seen since the 2011 uprising that ousted longtime dictator Hosni Mubarak.

Related: Eight states raise their gas tax

Health officials have counted the bodies of 23 people who died when Morsy's angry opponents met head-on overnight with his supporters at Cairo University.

Hundreds more left the clashes with bruises and other injuries, state-funded Al-Ahram news reported, after rocks, Molotov cocktails and bullets flew.

While the turmoil has thus far been contained within Egypt, the conflict between the Muslim Brotherhood and the Egyptian military "could spur other Islamist actions against allies of the military, including several Arab producing nations allied with the United States," according to ClearView Energy Partners.

Oil prices have risen about 16% in the last two months. Traders cite an improving economy, rising demand for crude oil from refiners in the United States, and the easing of supply bottleneck problems in the middle of the country as other reasons for the price run up.

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