Brent Oil Hits $115 Over Iraq’s Turmoil

Brent crude hit a nine-
month high near 115 dollars a barrel on Thursday as heavy fighting in Iraq limits oil supply from OPEC’s second-biggest producer.
Government forces battled Sunni militants for control of Iraq’s biggest refinery.
Meanwhile, Prime Minister Nuri al-Maliki waits for a U.S. response to an appeal for air strikes to beat back the threat to Baghdad.
The sprawling Baiji refinery, 200 km (130 miles) north of the Iraqi capital near Tikrit, was a battlefield.
Troops loyal to the Shi’ite-led government held off insurgents from the Islamic State of Iraq and the Levant and its allies who had stormed the perimeter, threatening national energy supplies.
Brent was poised for a third day of gains following a rise of more than four per cent last week after Islamist militants seized much of northern Iraq.
“There are clear concerns that significant supply disruption is not far off,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
Brent was up 10 cents at 114.36 dollars a barrel, after reaching an intraday peak of 114.80 dollars.
This is its highest since Sept. 9. On Wednesday, it ended up 81 cents at 114.26 dollars a barrel, the highest settlement since Sept. 6.
U.S. crude for July delivery rose 30 cents to 106.27 dollars a barrel.
VTB Capital oil and commodities strategist Andrey Kryuchenkov said Brent was near the top of its current range around 115 dollars.
“It will be hard to breach 115 dollars, but then there is little serious resistance until 120 dollars.”
Oil prices found more support after the Federal Reserve gave a positive assessment of the U.S. economy and committed to retaining accommodative monetary policy.
However, U.S. crude eased back after data from the U.S. Energy Information Administration showed domestic crude inventories declined by 579,000 barrels in the week ended June 13.
The decline was much less than the drawdown of 5.7 million barrels reported by industry group American Petroleum Institute (API).