Oil prices held fairly steady on the New York market and climbed modestly on the London market June 16 while traders and analysts remained focused on events in Iraq.
Militants have overrun parts of northern Iraq and reportedly killed hundreds of soldiers, raising concerns that the entire country could fall into turmoil.
Iraq’s oil-producing regions are in southern Iraq. Commerzbank said in a research note that “ISIS extremists are unlikely to succeed in hampering Iraqi oil shipments,” but that “the threat of civil war in OPEC’s second-most-important producer country” is supporting strong Brent crude oil prices.
Talks between Iran and representatives from US, UK, France, Germany, Russia, and China resumed June 16 in Vienna. Western sanctions have halted most of Iran’s crude oil supply to world markets.
Meanwhile, tensions between Russia and Ukraine have escalated again. OAO Gazprom said it would only export natural gas to Ukraine if Ukraine pays in advance.
“Gazprom supplies to Ukraine only the amount that has been paid for, and the amount that has been paid for is zero,” Gazprom said (OGJ Online, June 16, 2014).
European gas customers closely are following the ongoing dispute over Ukraine’s debt on gas supplied by Russia. Recent talks mediated by the European Union failed to provide a resolution. Gazprom said it would continue to ship gas exports across Ukraine to European customers.
The natural gas contract for July declined 3.2¢ to a rounded $4.71/MMbtu. On the US cash market, gas at Henry Hub, La., was $4.70/MMbtu, climbing 3¢.
Heating oil for July delivery was up 1¢ to a rounded $3/gal. Reformulated gasoline stock for oxygenate blending for July delivery gained 1.4¢ to a rounded $3.07/gal.
The August ICE contract for Brent crude delivery rose 48¢, closing at $112.94/bbl. The September contract climbed 57¢ to $112.25/bbl. The ICE gas oil contract for July increased $3.75 to $924.50/tonne.
The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for June 16 was $109.09/bbl, a 22¢ drop from June 13.
Contact Paula Dittrick at email@example.com.