Quantcast
Get breaking news alerts via email

Click here to manage your alerts
FILE - This Sept. 11, 2013 file photo shows oil pumps the desert oil fields of Sakhir, Bahrain. Dramatic changes in oil production around the globe, both higher and lower, are balancing each other out instead of wreaking havoc. This has helped world oil prices stay high enough to provide OPEC countries with robust income, but not so high that they scare customers away from buying more of their precious product. (AP Photo/Hasan Jamali, File)
Oil jumps to above $106 on Iraq violence
Energy » Insurgency’s success raises fears of supply disruptions from Iraq’s fields.
First Published Jun 12 2014 08:49 am • Last Updated Jun 12 2014 08:49 am

The price of oil jumped to above $106 a barrel Thursday as an insurgency in Iraq raised the risk of disruptions to supplies at a time when other major crude-producing countries are already pumping near capacity.

The al-Qaida-inspired group that captured two key cities in Iraq earlier this week vowed Thursday to march on to Baghdad.

Join the Discussion
Post a Comment

One of those two cities, Mosul, lies in an area that is a major gateway for Iraqi oil. While the loss of the city has no immediate effect on oil exports, now at over 3 million barrels a day, it adds to concerns over security and the country’s plans to expand oil production.

By mid-afternoon in Europe, the benchmark U.S. oil contract for July delivery was up $1.88 to $106.28 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the Nymex contract added 5 cents.

Brent crude, a benchmark for international oils, was up $2.25 to $112.20 a barrel on the ICE Futures exchange in London.

Before the news of the insurgency in Iraq, oil prices were already pressing higher after OPEC countries agreed this week to keep their output target unchanged at 30 million barrels a day. Traders interpreted the decision as recognition within OPEC that most members would not be able to substantially increase output in the short-term even if the world’s demand for crude increases.

Only Saudi Arabia would be able to substantially increase production, something that may soon be required if the situation in Iraq continues to push oil prices higher, analysts said.

"OPEC members — read Saudi Arabia specifically — might soon have to deal with the consequences of the spiraling conflict in Iraq," said a report from analysts JBC Energy in Vienna. "For now, the conflict is located in the north of the country, but it seems that the market may be concerned that it could spread toward the producing fields in the south."

Meanwhile, the U.S. Energy Department’s weekly inventories report showed a larger-than-expected drop in U.S. stockpiles of crude oil, down 2.6 million barrels in the week ending June 6 from the previous week. It was expected to show a 1.2 million barrel fall, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

In other energy futures trading on Nymex:


story continues below
story continues below

— Wholesale gasoline rose 5.61 cents to $3.056 a gallon.

— Natural gas gained 3.5 cents to $4.543 per 1,000 cubic feet.

— Heating oil added 5.25 cents to $2.956 a gallon.



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.