Oil market climbs on Iraq tensions
June 24, 2014, 12:09 am TWN
LONDON--Oil prices rose on Monday on continued violence in key crude producer Iraq, holding not far from last week's nine-month peaks, analysts said.
Brent crude for delivery in August added ten cents to US$114.91 a barrel in London late morning deals compared with Friday's closing level.
U.S. benchmark West Texas Intermediate for August gained 22 cents to US$107.05 per barrel.
“Brent crude opened today at fractionally below US$115 per barrel,” said Dorian Lucas, an analyst at British-based energy consultancy Inenco.
“Prices remain around the nine-month high average achieved in the back end of last week, supported by the continued violence and instability in Iraq.”
Last Thursday, Brent oil soared to US$115.71 a barrel — the highest point since Sept. 9, 2013.
And on Friday, New York prices jumped to US$107.73, attaining a level last seen on Sept. 19, 2013.
Iraqi security forces are struggling to hold their ground in the face of an insurgent onslaught that has seized major areas of five provinces, displaced hundreds of thousands of people and sparked fears that the country could be torn apart.
Oil continues to win support from the crisis in OPEC's (Organization of Petroleum Exporting Countries) number two oil producing nation, but markets have now priced in potential supply disruption, traders say.
“We see oil retaining support from the violence in Iraq, but markets have already priced in a risk premium in the last few weeks,” David Lennox, resource analyst with Fat Prophets in Sydney, said.
“We see prices remaining relatively stable at current levels as long as the crisis does not spread to Iraq's south where most of its exports are coming from,” added Lennox.