Oil prices firm amid Iraq-Turkey unrest
NEW YORK (AFP) — Oil prices rose on Monday, with New York close to 99 dollars a barrel, as Turkey's offensive in Iraq and fears of a forthcoming OPEC output cut sparked fresh supply worries, dealers said.
New York's main contract, light sweet crude for delivery in April, gained 42 cents to close at 99.23 dollars a barrel.
In London, Brent North Sea crude for April delivery settled 68 cents higher at 97.69 dollars.
"Several factors are impacting the price gains at the moment, not least the Turkish incursion into northern Iraq and the fact they look like extending that operation," said Bank of Ireland analyst Paul Harris.
"Investors and speculators are also looking at the commodity suite as a whole, and there's a belief there's more upside potential in the market."
Turkish fighter jets pounded Kurdish rebel positions for the fifth day on Monday in the mountainous Hakurk region of northern Iraq, security sources told AFP.
Ankara says an estimated 4,000 PKK rebels are holed up in northern Iraq and use the region as a springboard for attacks on Turkish territory as part of their campaign for self-rule in Kurdish-majority southeast Turkey.
The Iraqi oil ministry said Saturday that the action has not affected Iraqi exports of 300,000 barrels of oil per day through Turkey.
Iraq's northern oil fields are connected to the Turkish port of Ceyhan by a pipeline that crosses the two countries' border in northern Iraq's autonomous Kurdish region, where Turkish troops are fighting separatist rebels.
Most of Iraq's oil, a further 1.6 million barrels per day, is exported through the southern port of Basra.
The price of New York crude hit a record high 101.32 dollars on February 20 as traders fretted over tight supplies, which have also been hampered by geopolitical unrest in OPEC members Venezuela and Nigeria.
Recent price levels of 101 dollars reflected market expectations of a production cut by the OPEC crude producers' group, OPEC president Chakib Khelil said in a statement in the Algerian press on Monday.
Khelil indicated that the powerful 13-nation Organization of the Petroleum Exporting Countries would not increase production at a ministerial output meeting next week.
"The market has taken account of this probability (an OPEC output cut)," said Khelil, who is also Algeria's energy minister.
"It already reflects this eventuality. With prices at 101 dollars a barrel, speculators have already anticipated a possible reduction in OPEC output."
He said that OPEC, which is to meet in Vienna on March 5, "could not consider increasing" production.
"Either we hold (output) steady or we cut in order to restore market balance and stability," Khelil said.
"Supply is sufficient and it is clear that with an expected drop in consumption over the next six months, we cannot envisage a production hike."
He said the situation on the oil market "has not changed over the last month ... stocks of gasoline are very high and the price problems are still linked to speculation, an economic recession in the United States and even geopolitical tension."
OPEC earlier this month left its official daily output ceiling at 29.67 million barrels.
