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Oil up as U.S. looks to Iran over Iraq

Monday, June 16, 2014 - 01:37

June 16 - Brent crude has come close to a nine-month high topping $113 per barrel as Sunni insurgents advanced in Iraq. As Sonia Legg reports, concerns are growing that exports from OPEC's second-largest producer could be disrupted.

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Shias volunteer to fight in Basra - there's going to be no quick fix to the crisis in Iraq. That's sent oil prices rising again - Brent Crude almost touching $113 a barrel. Eugen Weinberg is Head of Commodity Research at Commerzbank. SOUNDBITE (German) HEAD OF COMMERZBANK'S COMMODITY RESEARCH, EUGEN WEINBERG, SAYING: "Iraq is one of the world's most important oil exporters and producers. It is now number two within OPEC behind Iran. Even a small reduction of Iraq's output will have a huge impact on the oil price. We already have several other conflicts. The situation in Libya has deprived the market of 1.5 million barrels a day and another half a million barrels are missing due to sanctions against Iran ." But Iran is now touted a possible solution to the crisis caused by the advance of Sunni militants. There's even talk of talk between Iran and the U.S. Darren Sinden from Titan Investment says that would have been unthinkable a few months ago. SOUNDBITE (English) DARREN SINDEN, TRADER, TITAN INVESTMENT, SAYING: "It is unknown territory to some extent because the relationship between those two is frosty at best but Iran does seem to be the best bet to some kind of regional solution and in the interim I think both gold and oil will continue to rise. Gold could head back to $1300 an ounce and we can look at both Brent and WTI to increase in the near term." The weakness of the government is a worry. But there's no immediate threat to Iraq's oil supplies - as most are hundreds of miles south of the fighting. Any attempts by the militants to venture in that direction is also expected to be met with far tougher resistance than in the north.

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Oil up as U.S. looks to Iran over Iraq

Monday, June 16, 2014 - 01:37