Oil Rises After Report Turkey Attacked Kurdish Rebels in Iraq

According to Bloomberg:

Dec. 26 (Bloomberg) — Crude oil rose for a third day in New York on concern shipments from Iraq may be disrupted after the Turkish military attacked bases of Kurdish rebels in northern Iraq.

Turkish planes bombed an area of Iraq near Turkey’s border to attack Kurdish rebels, Agence France-Presse reported yesterday, citing an unidentified Iraqi-Kurdish security official. Iraq exports crude oil through its northern pipeline to Turkey.

“That has made the market nervous,” said Tetsu Emori, a fund manager at Astmax Futures Ltd. in Tokyo. “Geopolitical issues are still out there keeping the upside risks intact.”

Crude oil for February delivery gained as much as 67 cents, or 0.7 percent, to $94.80 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $94.65 a barrel at 3:54 p.m. Singapore time. The contract closed at $94.13 on Dec. 24. Prices have risen 55 percent this year.

Nymex crude futures reached $99.29 a barrel on Nov. 21, the highest since trading began in 1983. The number of contracts traded fell 76 percent to 44,998 on Dec. 24 from Dec. 21.

Brent crude for February settlement rose as much as 81 cents, or 0.9 percent, to $93.51 a barrel on London’s ICE Futures Europe exchange. It traded at $93.36 a barrel at 3:32 p.m. Singapore time today.

Iraq exported 1.9 million barrels of oil a day in September compared with 1.69 million barrels a day in August, according to data supplied by the U.S. Department of State. The Middle East oil producer holds the world’s third-largest crude oil reserves.

Turkey Attacks

Turkish Prime Minister Recep Tayyip Erdogan said yesterday attacks on bases of the Kurdistan Workers Party, or PKK, in Iraq would continue.

Erdogan told lawmakers of his Justice and Development Party today that the military was targeting only the PKK. News reports have cited Iraqi Kurdish leaders as saying that “several” civilians have been killed.

Turkey launched bombing raids against the PKK in Iraq on Dec. 16 and Dec. 22 and briefly sent troops over the border. As many as 175 PKK fighters were killed in the first of those attacks, the Turkish military said on its Web site.

The military had killed five Kurdish rebels in an operation inside Turkey, the BBC reported on its Web site yesterday, citing a statement from the Turkish military.

U.S. Stockpiles

Crude oil rose on Dec. 24 on speculation that a U.S. Energy Department report tomorrow will show inventories in the world’s largest energy user fell for a sixth week.

Crude-oil stockpiles dropped 1.63 million barrels in the week ended Dec. 21, according to the median of responses by eight analysts surveyed by Bloomberg. The department is scheduled to release its weekly report on inventories on Dec. 27 at 10:30 a.m. in Washington, a day later than usual because of the Christmas holiday yesterday.

“Prices are being supported by speculation that U.S. inventory data will continue falling,” said Masahiko Sato, a senior analyst at Ovalnext Corp. in Tokyo.

See the full report at Bloomberg