Iraqi Oilfields Safe For Now

Brent crude oil began the week near a nine month high as the conflict in Iraq worsened and supply interruptions became more and more likely. The commodity traded at $113.17 at 6:30 GMT despite reports that the majority of Iraq’s oil supplies are out of harm’s way.

Crude prices gained more than 4 percent last week when fighting broke out in Iraq. The rally tapered off at the end of the week as the nation’s southern refineries seemed to be well protected for the moment, but the conflict looks like it could erupt into a civil war, something that would up prices.

CNBC reported that rebel militants overtook another city in northwestern Iraq on Sunday, tightening their grip on the second largest OPEC producer. On Friday, the White House said it was working to find a way to respond to the Iraqi government’s calls for help as the Sunni forces move closer to Baghdad. President Obama said it would take several days to consider the options, but ruled out the possibility of sending US troops into combat.

Meanwhile, oil output in Libya made modest progress after the nation’s western El Feel oilfield resumed production. The oilfield had been closed for over two months due to a protest which the government resolved over the weekend. El Feel is expected to reach 80,000 barrels on Monday, but many of the nation’s other oilfields and ports remain closed at the hands of protestors.

Also supporting oil prices was a report from the International Energy Agency which said that OPEC will have to ramp up production by about a million barrels per day in the second half of the year in order to meet global demand. The agency raised its demand estimate for the second half of 2014 by 150,000 barrels per day.