Iraq Fighting Sparks Oil Rally

Oil prices have risen to a nine-month high amid concerns that developments in Iraq may affect global supplies.

Brent crude futures rose 3% to $113.27 per barrel, while US crude gained more than 2% to $106.71, the highest reading for both since September.

Insurgents have taken over two Iraqi cities, prompting the US to say it was considering “all options” to help Iraq.

Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC) group.

“If this conflict knocked out Iraq as an exporter, that would have significant impact on prices,” said Christopher Bellew, a trader at Jefferies Bache.

The developments have also hurt global stock markets. Shares in the US fell on Thursday and major stock indexes in Asia were also down in early trade on Friday.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza