Oil Rises After Iraq Insurgency and Ukraine Russia Negotiations

West Texas Intermediate crude traded near a nine-month high as the violence in Iraq has so far spared the country’s main oil-producing region.

WTI and Brent were little changed after capping the biggest weekly gain in 2014. Iraq’s military pummeled the positions of Sunni Muslim insurgents who have captured large chunks of territory north of Baghdad. The fighting hasn’t spread to the south, which the U.S. Energy Information Administration says is home to three-quarters of Iraq’s crude output.

“The uncertainty about what could happen in Iraq is driving a lot of fear into the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “But a lot of geopolitical risk has already been priced in. We need to see the fundamentals tighten to propel oil higher.”

WTI for July delivery rose 12 cents to $107.03 a barrel at 10:17 a.m. on the New York Mercantile Exchange. The contract climbed to $106.91 on June 13, the highest close since Sept. 18. The volume of all futures traded was 24 percent higher than the 100-day average for the time of day.

Brent for August settlement gained 21 cents to $112.67 a barrel on the London-based ICE Futures Europe exchange. Volume was 8.6 percent above the 100-day average. The European benchmark crude traded at a premium of $6.31 to WTI on ICE.

via Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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