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

Finance

JV Wins $2bln Freeport LNG Contract in US

A joint venture (JV) between CB&I, Chiyoda International and Zachry Industrial has won a contract worth over $2bn from FLNG Liquefaction 3 for a liquefied natural

Puerto Rico Readies for Largest Cruise Ships

Thanks to a pier expansion and enhancement, Puerto Rico will welcome the two largest cruise ships in the world, Royal Caribbean International’s Oasis of the Seas and Allure of the Seas, in 2016.

Carnival Sails to Profit

The world's largest cruise company Miami-based Carnival Corp reported a net profit of $49 million, or 6 cents per share in the first quarter ended Feb. 28.   That

Energy

Feds Delay LNG’s Port Ambrose Application

The US Coast Guard and the US Maritime Administration (MARAD) have temporarily suspended their review of the proposed Port Ambrose deep-water LNG import terminal.

Austal Graduates 48 4-Yr Apprentices

Austal USA combined two classes to graduate a total of 48 members of Austal’s cutting-edge four-year apprenticeship program yesterday at a formal ceremony held at the Arthur R.

Mexico Unveils National Strategy ahead of Paris Climate Talks

Mexico on Friday said it will cap its greenhouse gas emissions by 2026, becoming one of the first countries to formally submit its national climate plan the

News

Is China Building a Naval Base in Africa?

Recently, The Namibian reported the existence of a "confidential letter from Namibia's ambassador to China, Ringo Abed, to Namibia's foreign minister stating that

JV Wins $2bln Freeport LNG Contract in US

A joint venture (JV) between CB&I, Chiyoda International and Zachry Industrial has won a contract worth over $2bn from FLNG Liquefaction 3 for a liquefied natural

Puerto Rico Readies for Largest Cruise Ships

Thanks to a pier expansion and enhancement, Puerto Rico will welcome the two largest cruise ships in the world, Royal Caribbean International’s Oasis of the Seas and Allure of the Seas, in 2016.

Middle East

Mediterranean Rescue Operations Strain Shipping

The Wall Street Journal ran a story yesterday describing how the increasing number of seaborne migrants making the journey from Africa to Europe has not only

Turkey Maritime Sector Alive & Kicking

Located on the periphery of two great continents, Turkey has benefitted from being in a favored position right at the center of an assertive and fast growing economic area.

Port of Aden Under Threat with Enemy at the Gates

As Saudi Arabia and its Arab allies stage air strikes against Shi'ite Muslim militiamen threatening to topple Yemeni President Abd-Rabbu Mansour Hadi, the southern

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Ship Electronics Ship Repair Ship Simulators
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: 0.1331 sec (8 req/sec)