Oil Rises To 9 Month High

Violence in Iraq has sent oil prices close to a nine-month high.

Brent crude fell 27 cents to $114.79 a barrel, after reaching $115.71 on Thursday, the highest since September 2013.

Oilfields south of Baghdad, which export at least 2.5 million barrels per day of oil, are still unaffected.

But the fighting in the north poses a risk to supplies, while foreign oil companies are beginning to pull out staff.

Paul Horsnell, head of commodities research at Standard Chartered bank, said: “The market has priced in existing geopolitical risk.”

Global spare capacity in oil production is at about 2%, he said, meaning that a spike in demand of more than 2% will outstrip production.

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