Several sources have reported that US benchmark West Texas Intermediate (WTI) prices have increased, perhaps as a result of US air strikes in Iraq.
WTI for September delivery has risen 32 cents to US$ 92.97 in mid-morning trade. Meanwhile, Brent holds relatively steady at US$ 104.97/bbl on ICE Futures Europe, having dropped 5 cents (less than 0.1%) from a one-week high reached on Friday.
US President Barack Obama ordered strikes in Iraq on Thursday, with the aim of preventing genocide by jihadists against minority groups and stopping an advance on the Kurdish capital, Arbil.
Bloomberg has indicated that futures have gained 0.4% in New York, rebounding from a 6.8% decline in July.
Hong Sung Ki, an analyst at Samsung Futures Inc. in Seoul, suggested that: “Despite the fact that there are several ongoing geopolitical conflicts, oil prices have remained significantly lower than they should be.”
Mark Keenan, head of commodities research Asia at Societe Generale, told CNBC: “The way in which oil is behaving with respect to the Iraqi geopolitical tensions is really the balance between potential short-term supply disruption, which so far have been non-existent, versus the long-term supply growth prospects”.
“It’s unlikely to move higher unless there’s a material disruption in supply”, he added.
Edited from various sources by Emma McAleavey.
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