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Oil Soars on Prospects of War in Iraq

June 12, 2014 at 20:50 by Vladimir Vyun

Crude oil surged today, reaching highest levels since September, on threat of a civil war in Iraq. Militants linked to al-Qaeda seized Mosul, the second largest city in Iraq, while Oil Minister Abdul Kareem al-Luaibi said that US planes may bomb northern Iraq. The country is the second biggest oil producer in the Organization of Petroleum Exporting Countries.

Crude oil often reacts strongly to the news from Middle East, the source of a big part of global crude production, and this time was no different. Oil prices usually rise in times of geopolitical risk in oil producing countries as this means threat of supply disruptions.

July futures for delivery of WTI crude oil jumped $2.30 (2.20 percent) to $106.70 per barrel as of 20:39 GMT on NYMEX today. Brent crude surged as much as $3.32 (3.02 percent) to $113.27 per barrel on ICE.

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