Oil rose for a second day on Thursday and briefly reached $66 a barrel, supported by expectations that a global supply glut is starting to ease and by fighting in Iraq.
The U.S. government’s supply report on Wednesday showed crude inventories declined for a third week. Stockpiles had been at record levels due to excess supply, raising concern that storage tanks could fill up.
Brent crude LCOc1 hit $66 a barrel and by 1345 GMT was up 73 cents at $65.76. U.S. crude CLc1 gained 82 cents at $59.80.
“Brent is getting a bit of impetus from the threat Islamic State is posing in Iraq,” said Christopher Bellew, senior broker at Jefferies Bache. “I can see prices moving up further from here on geopolitics towards $70.”
In Iraq, the city of Ramadi fell to Islamic State on Sunday in the most significant setback for Iraqi security forces in nearly a year. On Thursday, Iraqi forces said they thwarted a third attempt by the militants to break through their defensive lines east of the city.
About Alfonso Esparza
Senior Currency Strategist, OANDA, Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto. Follow on Twitterand on his Google+ profile.