Oil strikes 9 month peak on Iraq violence

GMT 10:31 2014 Friday ,13 June

Arab Today, arab today Oil strikes 9 month peak on Iraq violence

Engineers work at the Naher al-Umran gas refinery
London - AFP

Global oil prices surged to fresh nine-month high points on Friday as traders eyed worsening violence in OPEC's second biggest crude exporter Iraq.
Brent crude for July delivery soared to $114.69 per barrel in morning deals, touching the highest level since September 2013. It later stood at $113.57 in London afternoon deals, up 55 cents from Thursday, as traders booked profits.
US benchmark West Texas Intermediate for July added 42 cents to $106.95 a barrel.
"Prices are still being driven up by the events in Iraq, where militants from the Sunni terrorist group ISIL have seized further territory and are now said to be just a few kilometres away from the capital, Baghdad," said Commerzbank analyst Carsten Fritsch.
"The US is now considering air strikes by way of supporting the Iraqi armed forces in their fight against the ISIL. The Iraqi government increasingly appears to be losing control of the country."
- Jihadists near Baghdad -
The Iraqi government bolstered Baghdad's defences on Friday as jihadists pushed towards the capital and President Barack Obama said he was exploring all options to save Iraq's security forces from collapse.
Predominantly Shiite Muslim Iran will combat the "violence and terrorism" of Sunni extremists who have launched an anti-government offensive in neighbouring Iraq, President Hassan Rouhani warned.
"This is an extremist, terrorist group that is acting savagely," Rouhani said, without elaborating on what steps Tehran would take to thwart a bid by fighters from the Islamic State of Iraq and the Levant (ISIL) to push toward Baghdad after seizing several cities and towns to the north.
The International Energy Agency meanwhile cautioned that oil supplies from Iraq may not be at immediate risk.
Iraq is the second biggest oil exporter in the 12-nation Organization of Petroleum Exporting Countries (OPEC) after kingpin Saudi Arabia.
- IEA plays down impact -
"Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk," the Paris-based IEA said in its monthly oil market report on Friday.
It pointed out that Iraq's relatively small output from the north of the country has been off the market since March due to violence while output from the south has been on the rise and production has hit a 30-year high.
However the IEA, the energy monitoring and policy arm of the OECD group of advanced nations, pointed to the long-term importance of Iraq for the global energy market.
It calculated that "roughly 60 percent of the growth in OPEC crude production capacity for the rest of this decade will come from Iraq".
The 12-nation oil cartel, which pumps one third of the world's crude, earlier this week decided to hold their collective production target at 30 million barrels per day (bpd), where it has stood since late 2011, as they said the oil market was stable.
Oil producing nations have expressed their satisfaction with prices above $100 a barrel -- where they have been for most of this year -- as it brings them in sufficient revenue while appearing not to crimp growth in consuming nations.

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