Oil prices rise on US inventories, Iraq turmoil

, Jun 11: Oil

finished somewhat higher today, following an unexpectedly large decline in US crude supplies and worsening turmoil in Iraq. US benchmark West Texas Intermediate for July delivery edged higher by five cents to USD 104.40 a barrel on the New York Mercantile Exchange.

In London, European benchmark Brent oil for July delivery advanced 43 cents to USD 109.95 a barrel on the Intercontinental Exchange. The gains followed a weekly oil-inventory report by the US Department of Energy, which showed crude stocks fell 2.6 million barrels, more than the 1.7 million forecast by analysts surveyed by Dow Jones Newswire.

The report also showed a 200,000 barrel decline at a widely watched US oil-trading hub in Cushing, Oklahoma. Analysts kept watch on oil producer Iraq, where militants that had claimed the city of Mosul Monday seized the city of Tikrit Tuesday in a lightning jihadist offensive that swept closer to Baghdad.

The assault by the Islamic State of Iraq and the Levant has driven some 500,000 people from their homes and spurred pledges from both the US and Iran for more aid to Iraq. The oil market has so far not reacted strongly to the Iraq violence because "traders are probably saying this is far from the oil sector," said Michael Lynch, president of consultancy Strategic Energy.

PTI