Wall Street analysts believe crude oil prices could crack $116 or more a barrel by the end of the year because of political and military turmoil in Iraq.
Brent crude prices rose “above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war, Bloomberg said.
The Islamic State in Iraq and the Levant, known as ISIL, stopped repairs to the pipeline from the Kirkuk oil field to the Mediterranean port of Ceyhan in Turkey.
Iraq is OPEC’s second-biggest crude producer.
“The Persian Gulf country is forecast to provide 60 percent of the group’s growth for the rest of this decade, the International Energy Agency said June 13,” Bloomberg said.
“We’ve been waiting for the other shoe to drop in this tightly balanced market and now it’s happened,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, told Bloomberg June 13 by phone.
“There have been lurking risks but nobody was projecting how quickly things would turn worse.”
U.S. benchmark West Texas Intermediate crude on Monday rose as much as 63 cents, or 0.6 percent, to $107.54 a barrel on the New York Mercantile Exchange, Bloomberg said.
Gasoline prices in the U.S. have risen five consecutive days and hit an average of $3.662 a gallon for regular on Sunday.