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Oil Futures Hit 9-Month High On Iraq

Published 06/13/2014, 05:21 AM
Updated 07/09/2023, 06:31 AM

The energy markets were poised for a very strong weekly performance on Friday, with both oil benchmarks hitting the highest level in nine months amid fears of supply disruption in Iraq.

The geopolitical risk factor has been on for the past few days and the gloomy outlook for Iraqi oil supplies remains very uncertain as violence spreads across the fifth-largest reserve of oil in the world. Meanwhile, traders are so nervous over the latest developments in Iraq, after the United Stated warned military action in Iraq as Sunni Islamists militants seek to closing in on Baghdad.

As of 04:12 a.m. ET:

- West Texas Intermediate for July delivery rose 0.81% to 107.40 a barrel on New York Mercantile Exchange.

- Brent for July delivery rose 1.09% to $114.25 a barrel on ICE Exchange in London

A new crisis is taking its toll on Iraq as fighting unfolds between government forces and the radical Islamists who captured the second-largest city this week after soldiers scattered, leaving their uniforms and weapons behind.

Oil traders remain clearly anxious about the unfolding crisis in Iraq, even after the nation claimed a key victory yesterday; Takrit, Saddam Hussein`s hometown, was under full control of the military.

The country’s government launched air strikes on Sunni insurgent positions in and around the city of Mosul yesterday as Islamists forces marched towards the capital and Kurdish troops seized control of the key oil city of Kirkuk.

Oil futures extended gains as investors worried the violence could spread to Kurdistan, a mere 80km away.

In response to the rapid turn of events, the US government was examining air strikes and other forms of direct military action against the militants but the White House is reluctant to involve itself against in the war in Iraq.

US President Barack Obama believes the Iraqi government required assistance as violence is spreading and security deteriorating in the nation.

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