Crude oil prices soared on Monday as tensions between Baghdad and the Kurdish Regional Government in Kirkuk went up a notch with Iraqi troops sent to the oil-rich city.
U.S. West Texas Intermediate (WTI) crude futures jumped 0.89% to $51.91 a barrel, while Brent crude futures, the benchmark for oil prices outside the U.S., soared 1.22% to $57.88 a barrel.
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Iraqi forces took control of "vast areas" in Kirkuk without opposition from Kurdish Peshmerga, state TV said on Monday. The announcement came after reports that Iraqi forces began moving at around midnight toward an important airbase and oilfields located west of the city. Iraqi Prime Minister Haider al-Abadi gave orders to the security forces "to impose security in Kirkuk in cooperation with the population and the Peshmerga."
Overnight, crude oil prices settled at a two-week high on Friday, as geopolitical uncertainty in the Middle East raised the threat of supply disruptions, particularly in the wake of U.S. President Donald Trump’s refusal to certify Iran’s compliance with the nuclear deal.
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As was expected, Trump on Friday decided against certifying the 2015 Iran nuclear agreement, raising the risk of doing business in the oil-rich Middle Eastern nation. Iran is an OPEC member and key Middle Eastern oil producer.
Meanwhile, investors monitored ongoing unrest in Iraq following an independence referendum in Iraq’s Kurdistan region last month that threatens to disrupt the operation of a pipeline that carries 500,000-600,000 barrels of crude per day.
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