Oil prices fall as Iraqi output stays on line

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World oil prices fell Monday as investors reassessed a political crisis in Iraq.

NEW YORK (AFP) – World oil prices fell Monday as investors reassessed a political crisis in Iraq that remains concerning, but has yet to result in crude supply disruptions.

US benchmark West Texas Intermediate for August delivery dropped 66 cents to $106.17 a barrel on the New York Mercantile Exchange.

European benchmark Brent oil for August delivery fell 69 cents to $114.12 a barrel in London.

Iraq remained in focus as US Secretary of State John Kerry Monday pledged “intense” support for Iraq against the “existential threat” of an extremist militant offensive pushing toward Baghdad from the north and west.

The campaign of the Sunni Islamic State of Iraq and the Levant pushed oil prices to nine-month highs last week.

The militants have captured swathes of Iraq’s north but have yet to directly threaten the key oil-producing region in the south.

Iraq is the second-biggest oil exporter in the 12-nation Organization of Petroleum Exporting Countries (OPEC). It has more than 11 percent of the world’s proved resources and produces 3.4 million barrels per day.

“The insurgency is still continuing. However it’s still not impacting production and not really making any sort of material threat,” said Matt Smith, an analyst at Schneider Electric.

“Unless we see things really deteriorate or escalate, then we’re likely not to push too far above where we are here” with prices, Smith said.

“With no new developments, some profit taking is in order, but naturally limited as all will be waiting on Iraq” developments, said VTB Capital analyst Andrey Kryuchenkov.

2014-06-24

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