Egyptian protesters rally outside the presidential palace during anti-government demonstrations, Cairo, Egypt. (AP photo)
(USA Today) -- Oil prices pushed closer to $102 a barrel on Wednesday - the highest level in over a year - as embattled Egyptian President Mohammed Morsi vowed not to resign hours before a deadline to yield to the demands of millions of protesters.
Benchmark crude oil for August delivery was up $2.07 to $101.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.61, or 1.6%, to close at $99.60 on Tuesday in New York.
Egypt's military has drawn up a plan to suspend the Islamist-backed constitution, dissolve the Islamist-dominated legislature and set up an interim administration headed by the country's chief justice if Morsi fails to reach a solution with his opponents by the end of a Wednesday deadline, Egypt's state news agency reported.
Morsi has rejected the ultimatum, and clashes between his supporters and opponents have steadily intensified. Well over a dozen people were killed in a single incident of fighting outside Cairo University on Tuesday night.
Egypt is not an oil producer but its control of the Suez canal, one of the world's busiest shipping lanes which links the Mediterranean with the Red Sea, gives it a crucial role in maintaining global energy supplies.
Oil traders are also awaiting the Energy Department's weekly report on U.S. stockpiles of crude oil on Wednesday and expect the figures to show an increase in demand. Data for the week ending June 28 is expected to show a drawdown of 3 million barrels in crude oil stocks, according to a survey of analysts by Platts.
By Kim Hjelmgaard, USA TODAY