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Oil rises above $107 as Iraq turmoil intensifies

Published on NewsOK Modified: June 16, 2014 at 7:59 am •  Published: June 16, 2014

The price of oil climbed above $107 a barrel but eased from earlier highs Monday as fears of widening instability in Iraq, a key energy producer, were tempered by views that its oil exports would not be affected for now.

By mid-afternoon in Europe, the benchmark U.S. crude contract for July delivery was up 17 cents to $107.08 in electronic trading on the New York Mercantile Exchange. Earlier Monday, it reached $107.54. On Friday, it added 38 cents, gaining 4.1 percent on the week.

Brent crude, a benchmark for international oils, was up 11 cents to $112.57 a barrel on the ICE Futures exchange in London.

The northern town of Tal Afar became the latest to fall to the militants, who have already captured a vast swath of territory including Iraq's second-largest city, Mosul. The militants vow to march on Baghdad.

The capture of Mosul, a crucial gateway for Iraq's crude, raised worries about whether the country can rebuild its energy infrastructure and boost production to meet global demand, but most of Iraq's oil exports appeared to be beyond the militants' reach.

"Oil production in the south of the country is still secure," said analysts at Commerzbank in Frankfurt in a note to clients, pointing out that around 90 percent of Iraq's oil exports of 2.5 million barrels a day were shipped from there.

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