West TX Oil Touches $108 on Escalating Iraq Violence

West Texas Intermediate rose for a third day and Brent gained as militants in Iraq seized more territory and President Barack Obama warned that the crisis may spill over into other countries.

August futures climbed as much as 0.6 percent in New York. Fighters from the Islamic State in Iraq and the Levant took control of Iraq’s border crossings with Jordan and Syria, Hameed Ahmed Hashim, a member of the Anbar provincial council, said by phone yesterday. A Chinese manufacturing gauge rose to a seven-month high in June, indicating that the economy of the world’s second-biggest oil user is picking up.

“There is a fairly significant risk premium built in to prices now,” said Ric Spooner, a chief strategist at CMC Markets in Sydney who predicts investors may sell West Texas contracts if prices climb to $107.70 a barrel. “If it continues to unravel quickly with Baghdad looking under threat, we might see that risk premium extended.”

Bloomberg

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