Oil prices rose above $85 a barrel Tuesday as violent street protests in Iran raised fears crude supplies could be disrupted from one of world's biggest producers. By early afternoon in Europe, benchmark crude for March delivery was up 40 cents at $85.21 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 77 cents to settle at $84.81 on Monday. In London, Brent crude for April delivery gained 28 cents to $103.36 a barrel on the ICE Futures exchange. The spread between the Nymex and Brent contracts remained at record levels. While Nymex is currently distorted to the downside as a result of the high U.S. stockpiles, the opposite is probably true of Brent due to more attention from institutional investors and temporary production stoppages in the North Sea, said Commerzbank analysts in Frankfurt. "We expect the price differential between Brent and WTI to narrow to its usual level of $1-$2 in the upcoming months," Commerzbank said. West Texas Intermediate crude, or WTI, is the benchmark Nymex contract with its delivery point at Cushing, Oklahoma. Pro-democracy protesters battled police in Tehran on Monday, emboldened by the protests in Egypt that forced President Hosni Mubarak from power last week. There have also been anti-government protests in Bahrain, Yemen and Algeria while mass demonstrations helped bring down Tunisia's long-time ruler Ben Ali earlier this year. Iran is the second-largest oil exporter in the Organization of Petroleum Exporting Countries behind Saudi Arabia. "Investors had been worried about Algeria and Jordan, Yemen and the Arab Gulf states," energy consultant Cameron Hanover said in a report. "To see the pro-democracy movement in Iran caught us by surprise. It seems that everyone in power is nervous. Every country in the Middle East seems suddenly in play." In other Nymex trading in March contracts, heating oil fell 0.05 cent to $2.7499 a gallon and gasoline gained 0.42 cent to $2.5216 a gallon. Natural gas futures were down 0.7 cent at $3.918 per 1,000 cubic feet.
