Brent climbs above $115 on Iraq tensions

oil price.brent23 June 2014, News Wires – Brent crude rose above $115 per barrel on Monday, holding near a nine-month high amid concerns of possible disruptions to supply from Iraq where Sunni insurgents seized control of more towns over the weekend.

Data from top energy consumer China showing an expansion in the country’s factory sector for the first time in six months also underpinned oil prices, Reuters reported.

Brent crude rose 30 cents to $115.11 early Monday morning , just shy of $115.71 hit on Thursday, the highest since 9 September.

US crude for August delivery gained 32 cents to $107.15. The July contract expired on Friday.

“Sunni insurgents appear to control more towns, which is helping to keep the oil markets where they are. The oil markets have a pretty significant risk premium built-in already. Prices are likely to hold these levels,” Reuters quoted CMC Markets chief market analyst Ric Spooner as saying.

Brent is likely to be close to $114.50 per barrel next Friday, Spooner forecast. He expects US crude to climb to about $108 per barrel this week.

Militants from the Islamic State of Iraq and the Levant seized three towns in Iraq’s western Anbar province after taking control of two frontier crossings on the Iraq-Syrian border. Traffic on the main highway from Jordan to Baghdad was also halted after militants took control of Rutba on Sunday.

But there was a lull in fighting at Iraq’s largest refinery, the 300,000-barrel-per-day Baiji complex, on Sunday although militants surrounded the compound.

US Secretary of State John Kerry is expected to discuss possible Iraq oil supply disruptions with Gulf countries during a visit to the region this week, a senior State Department official said on Sunday.

Oil prices also drew support from the release of China’s factory data that showed new orders surged, according to a preliminary HSBC survey, indicating the economy is stabilising thanks to Beijing’s measures to shore up growth.

The HSBC/Markit Flash China Manufacturing Purchasing Managers’ Index rose to 50.8 in June, the first time since December PMI was in growth territory.

The oil market is also keeping eye on Libya’s oil production after a series of stoppages there.

The western El Feel oilfield is producing 95,000 bpd, boosting the country’s oil production to around 270,000 bpd, a spokesman for state-run National Oil Corporation said on Sunday. Output at the field resumed after a protest there ended more than one week ago.

Two tankers were docking at Libya’s eastern Hariga oil port to load a total of 1.35 million barrels, the first shipments since the port reopened after a protest by security guards, a spokesman for NOC said on Sunday.


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