Iraq insurgency threat pushes oil prices higher

Iraq insurgency threat pushes oil prices higher
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Oil prices have continued to rise on concerns that the Islamist rebel insurgency in Iraq could trigger civil war and eventually hit exports.

Brent crude was over $113 a barrelon Friday, having risen about $4 since the start of the week.

US light crude recorded its biggest jump since December.

Analysts point out that right now there is no direct threat to the area south of Baghdad, source for most of Iraq’s current oil exports.

In addition exports from the north are considered safe for the moment, as the major Kirkuk oil hub is held by Kurdish forces.

“The market in general is trying to assess the risks on Iraq. There was a big market reaction and then the IEA (International Energy Agency) said it did not see a risk to supplies so the volatility is reflecting this,” Olivier Jakob at Petromatrix consultancy said.

The IEA played down fears over the possible sudden loss of oil exports from Iraq in its monthly Oil Market Report.

“Concerning as the latest events in Iraq may be, they might not for now, if the conflict does not spread further, put additional Iraqi oil supplies immediately at risk,” the Paris-based agency said.

with Reuters