From MarketWatch
Crude oil prices jumped to an almost three-week high on Monday, driven by increased tensions in the Middle East after Iraq pushed into the oil city of Kirkuk.
November West Texas Intermediate crude CLX7, +0.93% climbed by 61 cents, or 1.2%, to $52.06 a barrel on the New York Mercantile Exchange, setting it on track for its highest settlement price since Sept. 27, according to FactSet data.
Brent crude for December LCOZ7, +1.17% gained 87 cents, or 1.5%, to $58.04, also trading around its highest level since late September.
“The oil market is firmly in the grip of geopolitical risks at present,” analysts at Commerzbank said in a Monday note.
On Monday, the risks in the Middle East intensified after Iraqi forces reportedly entered Kirkuk, which is a major oil-producing area and has been held by Kurdish fighters. Tensions between the Kurdish Regional Government and Baghdad have been building after the Kurds voted for independence in a September referendum, sparking concerns over Iraq’s oil exports. Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries.
“In recent months we have stressed on a number of occasions that the tensions and potential effects on the production and transport infrastructure in the region pose the biggest risk to our fairly conservative price forecasts. We otherwise see the oil market as still amply supplied, which would rather justify a Brent price of $50 per barrel,” said analysts at Commerzbank.
Still, Mihir Kapadia, chief executive officer and founder of Sun Global Investments, said that “while there is an ongoing political feud, it’s out of the best interest of both sides to not disrupt oil production.”
Last week, the U.S. oil benchmark rose more than 4%, boosted by a mix of bullish Chinese data, geopolitical risks in the Middle East and President Donald Trump’s refusal to certify Iran’s compliance with the nuclear deal.
In other energy products on Monday, gasoline for November RBX7, +0.01% climbed 0.6% to $1.632 a gallon, while November heating oil HOX7, +0.94% added 1.4% to $1.822 a gallon.
November natural gas NGX17, -1.83% slid 2.7% to $2.919 per million British thermal units, easing back after posting a climb of nearly 5% for last week.
WTI oil traded between $51.40 and $52.40 most of the day Monday.
