Ira Conflit Boosts Oil Price

The price of Brent crude spiked on Friday over concerns about the ongoing insurgency in Iraq.

Oil prices settled down, but at $4 per barrel higher than at the beginning of the week.

Reassurances about the flow of oil supplies went some way to calming market jitters.

Brent crude futures stabilised at $112.32 per barrel, while US crude levelled to $106.55, after 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.

According to figures from the International Energy Agency (IEA), Iraq accounts for roughly 4% of global oil production.

Nevertheless, the IEA, which was set up to deal with crises in oil supply, on Friday said: “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 IEA reassurances came after OPEC said on Thursday that extra production should be more than sufficient to meet growing demand.

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