Oil Prices Climb Again Amid Escalating Violence In Iraq

Posted by Joseph R. Fonseca
Saturday, June 14, 2014

 

Crude oil prices rose to new nine-month highs on Friday as concerns persisted that an insurgency in Iraq could disrupt oil exports from the second-largest OPEC producer.

Grand Ayatollah Ali al-Sistani, the highest religious authority for Shi'ites, on Friday urged his followers to take up arms against Sunni militants advancing south toward Baghdad, raising the prospect of further violence.

The surge in both Brent and U.S. crude prices, up about $4 this week, lost some momentum on Friday as the market waited to see if the conflict in Iraq would threaten oil refineries south of Baghdad.

"Right now the market is looking for a comfort zone," said James Williams, an energy economist at WTRG Economics in London, Arkansas. "Should the militants reach Iraq's oil patch, then we have a potential for much higher prices."

Brent futures gained 39 cents to settle at $113.41 per barrel, the highest since Sept. 9. U.S. crude oil gained 38 cents to settle at $106.91 per barrel, the highest level since Sept. 18. The spread <CL-LCO1=R> between the two benchmarks closed at $6.50.

Brent was set to gain more than 5 percent this week, the biggest weekly rise since last July, while U.S. crude was on track for its biggest weekly jump since December.

"You want to have a premium as Iraq is more unstable than last week, but with no disruptions, how much can you keep?" said Olivier Jakob at Petromatrix consultancy in Switzerland.

The bulk of Iraq's current oil exports come from south of Baghdad, still far from the Islamist rebel fighters. Should the militants advance south of the capital, analysts expect them to encounter much greater resistance.

Iraqi exports from the north are considered safe for the moment, analysts said, as the major Kirkuk oil hub is held by Kurdish forces.

U.S. President Barack Obama said on Friday that the United States would not put troops on the ground in Iraq and was reviewing other options to assist the Iraqi government.

Obama said the insurgency so far had not caused major disruptions to oil supplies from Iraq, but that if insurgents took control of refineries, other oil producers in the Middle East would need to help "pick up the slack."

The International Energy Agency played down fears over the possible loss of oil exports from Iraq in its monthly Oil Market Report, which was released on Friday.

"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 agency said.

The IEA said on Friday that OPEC would need to produce 1 million barrels per day (bpd) more oil on average in the second half of 2014 to balance the global market, which will see a steep seasonal spike in demand.

The bullish assessment contrasted with the view of OPEC, which on Thursday said extra production would be more than sufficient to meet growing demand.

(Additional reporting by Julia Payne and Christopher Johnson in London and Manash Goswami in Singapore; Editing by Dale Hudson, Bernadette Baum and Chizu Nomiyama)

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Nordic American Offshore Declares Dividend

Nordic American Offshore Ltd. today announced that its board of directors has declared a dividend of $0.45 per common share for the third quarter 2014. This is the same as for the second quarter 2014.

Bollore Africa Logistics Sees Profit Plunge in H1

First half 2014 profit at shipping company Bollore Africa Logistics plunged to 5.89 billion CFA francs ($11.48 million) from 9.45 billion CFA francs in the same period last year,

Maduro Says Venezuela's 2015 Budget to Put Oil at $60

Venezuela's 2015 budget will be based on a target oil price of $60 dollars per barrel, President Nicolas Maduro said on Friday night, but he repeated expectations that prices will recover.

Energy

Corvus Gains Support from WINN Initiative

Corvus Energy announced today the award of $1.3 million in repayable assistance from the Western Innovation (WINN) Initiative for its project to further develop the Corvus Energy Storage System.

Ocean Rig, Petrobras Agree to $1.1b Drill Ships Lease

Cyprus-based Ocean Rig UDW Inc said on Monday that it signed a $1.1 billion three-year contract with Brazil's state-run oil company, Petroleo Brasileiro SA, to

GAO: Ending Crude Export Ban Could Ease 'Price at the Pump'

As the energy profile of the U.S. continues to improve and evolve daily, fresh debate in favor of exporting oil and gas products -- which would have a significant impact on the U.

News

Nordic American Offshore Declares Dividend

Nordic American Offshore Ltd. today announced that its board of directors has declared a dividend of $0.45 per common share for the third quarter 2014. This is the same as for the second quarter 2014.

Missouri River Basin is Booming

The U.S. Army Corps of Engineers Missouri River Basin Water Management Division is maintaining above normal releases at the four lower dams on the Missouri River.

Bollore Africa Logistics Sees Profit Plunge in H1

First half 2014 profit at shipping company Bollore Africa Logistics plunged to 5.89 billion CFA francs ($11.48 million) from 9.45 billion CFA francs in the same period last year,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Pipelines Ship Electronics Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1593 sec (6 req/sec)