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 February 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Ten Migrants Die in Mediterranean, a Thousand Rescued

At least 10 North African migrants died when their rubber boat overturned in the southern Mediterranean while almost a thousand more from a total of seven vessels

Access to Brazil's Itajai Port to Open as Truck Protest Ends

Protesters have agreed to open access to Brazil's main poultry exporting port of Itajai in Santa Catarina state, the port said on Wednesday, ending a lingering

Seadrill: Rig Rates Have Not Bottomed

The market for oil and gas drilling rigs continues to deteriorate as oil companies cut back on investments, Seadrill Chief Financial Officer Rune Magnus Lundetrae

Energy

BG Group's Australian Project Helping to Double LNG Supplies

A smooth start to operations at BG Group's Australian project in Queensland is expected to help the British company to roughly double its liquefied natural gas (LNG) supplies in 2015/16,

Seadrill: Rig Rates Have Not Bottomed

The market for oil and gas drilling rigs continues to deteriorate as oil companies cut back on investments, Seadrill Chief Financial Officer Rune Magnus Lundetrae

Ghana-Ivory Coast Maritime Dispute Mar Tullow

A dispute over maritime boundaries between Ghana and Ivory Coast is damaging Tullow Oil, which risks postponement of its TEN project in the waters off Ghana's coastline.

News

NORDEN Publishes CSR Report

Dampskibsselskabet NORDEN A/S has published its Corporate Social Responsibility (CSR) report 2014. Entitled, “On track”, the CSR report presents an overview of NORDEN’s CSR strategy,

Fire Aboard US Navy Ship

A fire broke out aboard a U.S. Navy amphibious dock landing ship USS Gunston Hall (LSD 44) at approximately 2 p.m. yesterday while the ship was undergoing maintenance

Wheelabrator Opens Ontario Location

Surface preparation company Wheelabrator Group (Canada) Ltd. celebrated its grand opening with a ribbon cutting ceremony and luncheon after moving to a new location and office complex in Burlington,

Middle East

Newlead Bags Panamax COA

NewLead Holdings Ltd. announced today that it has entered into a Contract of Affreightment for one of its dry bulk vessels, the Panamax Newlead Markela, for the transportation,

ICS: EU Must Act in Mediterranean Crisis

The International Chamber of Shipping (ICS) says EU Member States must act urgently to prevent the loss of thousands more lives, as the humanitarian crisis in the

Interview: Nakilat's Samir Bailouni

SGMF Membership - Uncovered: An interview with Samir Bailouni, Nakilat The Society for Gas and Marine Fuel (SGMF) recently interviewed one of its members, Samir

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Offshore Oil Ship Repair Ship Simulators Shipbuilding / Vessel Construction 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: 0.1259 sec (8 req/sec)