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Oil prices rise over concerns of Turkish incursion into Iraq

Oil prices rise over concerns of Turkish incursion into Iraq

Oil prices rose to near US$100 a barrel yesterday as the Turkish incursion into northern Iraq and warnings by Iran against further sanctions heightened concerns over potential crude supply disruptions.
Crude futures were supported by Turkey's ongoing cross-border ground operation against Kurdish rebels in Iraq. Thirty-three rebels were killed in Sunday's fighting, bringing the rebel death toll since Thursday to 112, according to Turkey's military.
"The market perception is that (the incursion) could threaten the supply of crude from northern Iraq," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
The incursion is the first confirmed Turkish military ground operation in Iraq since the U.S.-led invasion that toppled Saddam Hussein in 2003. Turkey serves as an oil and gas transportation hub, and Iraq is a major crude supplier to Europe.
Light, sweet crude for April delivery rose to US$99.55 a barrel after climbing as high as US$99.70 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore yesterday.
The contract settled 0.6 percent, higher at US$98.81 a barrel on Friday.
Also driving prices higher was a threat by Iranian President Mahmoud Ahmadinejad on Saturday that Tehran would take unspecified "decisive reciprocal measures" against any country that imposed additional sanctions against his country.
Ahmadinejad's warning followed the release on Friday of an International Atomic Energy Agency report that said many past questions about Iran's nuclear program had been resolved, but highlighted Tehran's continued refusal to halt uranium enrichment, paving the way for the next set of sanctions.
Iran is already under two sets of U.N. Security Council sanctions for refusing to suspend uranium enrichment. The five permanent members of the Security Council and Germany have agreed on a draft resolution for a third set of sanctions.
"The IAEA's latest report last week on Iran again turned a focus on Iran's nuclear program which raises questions about sanctions, and that has in turn added to the mix that has left oil prices higher," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.
Tehran insists its program is intended only to produce energy, but the U.S. and some of its allies suspect it could lead to weapons development.
In other Nymex trading, heating oil futures added to US$2.7781 a gallon while gasoline prices rose to US$2.554 a gallon.
Natural gas futures added US$9.337 per 1,000 cubic feet.


Updated : 2021-04-23 07:17 GMT+08:00