Oil prices reached a new record on Monday in global markets, exceeding 84 dollars per barrel due to escalating armed tensions in northern Iraq, fears of heating oil shortages during winter, and a low dollar exchange rate.
A barrel of crude oil increased by 58 cents in the U.S. market to 84.27 dollars after briefly reaching a record 84.35 dollars. In the London market, a barrel rose by 62 cents to 81.17 dollars, also reaching a record 81.26 dollars. Prices surged sharply on Friday after the Kurdistan Workers’ Party announced it would return from northern Iraq to Turkey and organize attacks on the Turkish government. The Turkish artillery responded by firing several shells at a village in northern Iraq, ahead of the Turkish parliament’s response to the government’s request to launch a major military operation against Kurdish rebels based in the area.
"This is just one of the reasons why price increases are expected, but in my opinion, not the main one," emphasized Tetsu Emori from Japan’s Astmax Futures. Analysts also point to a wave of speculative oil purchases, as investors seek to protect themselves from fuel shortages during winter and from the dollar sliding to a record low level. The dollar has somewhat recovered against the euro and yen, but some analysts predict that forecasts regarding currency exchange rates provide the strongest support for oil prices, despite the strengthening geopolitical risks in Iraq and its surroundings, in a region that produces one-third of the world’s oil.(H)
