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Oil price skyrockets to over US$107, fueled by worsening Iraqi violence

The price of oil rose above US$107 Monday as violence worsened in Iraq with reports of a massacre by Islamic militants, raising fears of widening instability in the country, a key energy producer.

After rising 4.1 percent last week, benchmark U.S. crude for July delivery rose 36 cents to US$107.27 — the highest in nine months — in electronic trading on the New York Mercantile Exchange.

Brent crude, a benchmark for international oils, gained 63 cents to US$113.09 a barrel in London.

The capture of Mosul, a key gateway for Iraqi crude, raises worries about whether the country can rebuild its energy infrastructure and raise production to meet global demand.

“The U.S. has ruled out putting troops on the ground, raising fears of a protracted period of tensions that might spill over into the wider Middle East,” Mizuho Bank analysts said in a report. “With no signs of any decisive U.S. actions to enforce the security situation, oil prices continue to price in fears of supply disruptions.”

In other energy futures trading in New York:

— Wholesale gasoline rose 1.3 cents to US$3.036 a gallon.

— Natural gas rose 0.4 cent to US$4.78 per 1,000 cubic feet.

— Heating oil fell 1.6 cent to US$3.003 a gallon.

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