Oil prices up as rebels near Iraq capital

AFP FILE PHOTO

SINGAPORE—Crude prices on Friday extended the previous day’s rally to sit at nine-month highs after militants closed in on Iraq’s capital Baghdad, fueling fears over supplies from the major crude producer.

US benchmark West Texas Intermediate advanced 47 cents to $107 in afternoon trade after surging $2.13 in New York on Thursday to reach its highest level since September.

Brent North Sea crude gained 28 cents to $113.30 per barrel after shooting up $3.07 in London.

Second largest producer

Iraq is the second biggest producer in the oil cartel Organization of Petroleum Exporting Countries (Opec) after Saudi Arabia and any escalation of the violence there could hit supplies, sending prices higher, analysts said.

“Any disruption at Opec’s second largest producer risks tearing apart the global rebound we had seen this year,” Desmond Chua, market analyst at CMC Markets in Singapore, said in a note.

Back to recession

Phillip Futures warned that “higher energy prices will apply brakes on a global recovery and may even cause the world to reenter recession.”

US President Barack Obama has said his national security team “is looking at all the options” to help the Iraqi government.

Iraq, which has the world’s fifth largest proven reserves, pumps an average of about 3.5 million barrels of oil a day.

On Wednesday, Opec maintained its output ceiling where it has been since late 2011.

Saudi Oil Minister Ali al-Naimi expressed satisfaction with a relatively stable oil market. AFP

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