ZPL Energy is an Independent Oil & Gas Exploration and Production Company

Industrial News

Home ยป Industrial News

Oil Prices Rise On Reports US Mulling Airstrikes On Iraqi Militants

On 07 Aug, 2014

NEW YORK, Aug 7 (Reuters) - Crude oil prices rebounded on Thursday after reports the United States was considering airstrikes on advancing Islamic militants in Iraq revived concerns about supply disruptions from OPEC's No. 2 oil producer.

Brent crude gained 85 cents to settle at $105.44 a barrel, and rose more than $1 in post-settlement trading. It had closed at $104.59 a barrel on Wednesday, its lowest settlement since Nov. 7.

U.S. crude gained 42 cents to settle at $97.34 a barrel, after closing at $96.92 a barrel in the previous session, the weakest level since February.

The spread between the two benchmarks closed at $8.10, its widest since June 24.

Brent and U.S. crude were down earlier on Thursday but rallied after the New York Times reported U.S. President Barack Obama was considering airstrikes on the Islamic State fighters who have surged across northern Iraq toward the capital of its Kurdish region.

White House spokesman Josh Earnest would not confirm that airstrikes were being considered. "There are no American military solutions to the problems in Iraq," he said.

The reports of possible U.S. airstrikes "helped move the markets, but we need to see that actually happen before oil prices can go up higher," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. He added that ample global supplies were still pressuring oil prices, noting that oil supplies from Iraq had not yet been interrupted.

In mid-June, Brent and U.S. crude hit nine-month highs on worries about the Sunni-fueled insurgency in Iraq. But prices have fallen more than $10 a barrel over the past six weeks despite the continued unrest, as traders and investors shifted their attention to weak U.S. and global economic fundamentals.

Earlier on Thursday, two car bombs killed nine people in the Kurdish-held Iraqi oil city of Kirkuk, police and medical sources said.

Shares in Oslo-listed oil producer DNO fell as much as 24 percent on news of the insurgents' advance, as investors worried about companies exposed to the unrest in the Kurdish region. The company said its operations at the Kurdish Takwe field near Iraq's border with Turkey had not been affected.

"Some market participants must have become a little complacent about what's happening in Iraq," said Andrew Lipow, president of Lipow Oil Associates in Houston, Texas.

Meanwhile, refining issues in the United States, including the four-week shut-down of a refinery in Coffeyville, Kansas, are weighing on U.S. crude, ahead of the refinery turnaround season in autumn, characterized by typically weaker demand.

(Additional reporting By Jack Stubbs and Jacob Gronholt-Pedersen; Editing by William Hardy, Dale Hudson, David Evans, Edward McAllister, David Gregorio and Paul Simao)

Copyright 2014 Thomson Reuters.

According to Rigzone

 

 

Tags: gas, oil, fuel, exploration

Other News

Industrial News