Crude oil prices soar to 9-month high as USA’s Iraqi puppet Govt stares at military defeat
14 Jun 2014 11:01 PM GMT
Crude prices on Friday extended the previous day's rally to sit at nine-month highs after militants closed in on Iraq's capital Baghdad, fuelling fears over supplies from the major crude producer.
US benchmark, West Texas Intermediate, advanced 73 cents to $107.26 in late-morning trade after surging $2.13 in New York on Thursday to reach its highest level since September.
Brent North Sea crude gained 57 cents to $113.59 per barrel after shooting up $3.07 in London.Iraq is the second biggest producer in the OPEC oil cartel after Saudi Arabia and any escalation of the violence there could hit supplies, sending prices higher, analysts said.
‘Any disruption at OPEC's second largest producer risks tearing apart the global rebound we had seen this year,’ Desmond Chua, market analyst at CMC Markets in Singapore, said in a note.
Phillip Futures warned that ‘higher energy prices will apply brakes on a global recovery and may even cause the world to re-enter recession’.
US President Barack Obama has said his national security team ‘is looking at all the options’ to help the Iraqi government.Iraq, which has the world's fifth largest proven reserves, pumps an average of about 3.5 million barrels of oil a day.
On Wednesday, the Organization of Petroleum Exporting Countries, meeting in Vienna, maintained its output ceiling where it has been since late 2011. Saudi Oil Minister Ali al-Naimi expressed satisfaction with a relatively stable oil market.Its ripple effects could be felt in Indian markets as shares of oil marketing companies — HPCL, BPCL and IOC — on Friday tanked as much as 8.2 per cent following civil unrest in major producer Iraq.
HPCL shares plunged 8.17 per cent to Rs 392.25, while BPCL lost 5.14 per cent to Rs 568.25 on the BSE. IOC tumbled 5.07 per cent to Rs 333.20. The Bombay Stock Exchange (BSE )oil & gas index ended at 11,361.96, down 1.90 per cent. Higher crude oil prices could increase under-recoveries of oil marketing companies that sell at subsidised rates.
Besides, a surging oil imports bill could pose problems for the economy which Prime Minister Narendra Modi is trying to reboot, said brokers.
‘Markets witnessed heavy selling pressure following concerns over higher oil prices. Rising tensions in Iraq are a major reason for this sudden rise in crude oil,’ said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
US benchmark, West Texas Intermediate, advanced 73 cents to $107.26 in late-morning trade after surging $2.13 in New York on Thursday to reach its highest level since September.
Brent North Sea crude gained 57 cents to $113.59 per barrel after shooting up $3.07 in London.Iraq is the second biggest producer in the OPEC oil cartel after Saudi Arabia and any escalation of the violence there could hit supplies, sending prices higher, analysts said.
‘Any disruption at OPEC's second largest producer risks tearing apart the global rebound we had seen this year,’ Desmond Chua, market analyst at CMC Markets in Singapore, said in a note.
Phillip Futures warned that ‘higher energy prices will apply brakes on a global recovery and may even cause the world to re-enter recession’.
US President Barack Obama has said his national security team ‘is looking at all the options’ to help the Iraqi government.Iraq, which has the world's fifth largest proven reserves, pumps an average of about 3.5 million barrels of oil a day.
On Wednesday, the Organization of Petroleum Exporting Countries, meeting in Vienna, maintained its output ceiling where it has been since late 2011. Saudi Oil Minister Ali al-Naimi expressed satisfaction with a relatively stable oil market.Its ripple effects could be felt in Indian markets as shares of oil marketing companies — HPCL, BPCL and IOC — on Friday tanked as much as 8.2 per cent following civil unrest in major producer Iraq.
HPCL shares plunged 8.17 per cent to Rs 392.25, while BPCL lost 5.14 per cent to Rs 568.25 on the BSE. IOC tumbled 5.07 per cent to Rs 333.20. The Bombay Stock Exchange (BSE )oil & gas index ended at 11,361.96, down 1.90 per cent. Higher crude oil prices could increase under-recoveries of oil marketing companies that sell at subsidised rates.
Besides, a surging oil imports bill could pose problems for the economy which Prime Minister Narendra Modi is trying to reboot, said brokers.
‘Markets witnessed heavy selling pressure following concerns over higher oil prices. Rising tensions in Iraq are a major reason for this sudden rise in crude oil,’ said Rakesh Goyal, Senior Vice President, Bonanza Portfolio Ltd.
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