AFP, New York :
Global oil prices surged to fresh nine-month highs Friday as traders eyed escalating violence in Iraq, OPEC’s second-biggest crude exporter.
US benchmark West Texas Intermediate (WTI) for July rose 38 cents to close at $106.91 a barrel, its highest level since September 18, 2013.
Brent crude for July delivery climbed 39 cents to $113.41 a barrel in London trade, its highest close since September 9.
Prices had rallied sharply on Thursday, more than $2 for WTI and $3 for Brent, Sunni militants pushed toward Baghdad and forces from Iraq’s autonomous Kurdish region took control of the northern oil hub of Kirkuk.
“People are calmer today because they realize that the threat to oil supplies is not very strong,” said Michael Lynch of Strategic Energy and Economic Research.
The militant offensive, spearheaded by the jihadist Islamic State of Iraq and the Levant, has taken a huge swathe of predominantly Sunni Arab territory in northern and north-central Iraq since its launch in Mosul late Monday.
On Friday, they battled pro-government forces near Muqdadiyah, just 80 kilometres (50 miles) from Baghdad’s city limits.
US President Barack Obama said he was examining options short of sending troops to help Iraq counter the Sunni militant onslaught.
“It’s looking like a war here, and to the extent there is any credible threat to Bagdad, to the central government, and of course the southern Iraq oil, this is a major concern for the oil market,” said John Kilduff of Again Capital. Kilduff said the market had not yet entiredly priced in the situation.
