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Turkey tensions lift oil prices Oil hits $86 on Turkey tensions
(about 3 hours later)
Global oil prices have surged to fresh highs after increased tensions between Turkey and Kurdish rebels in northern Iraq and concerns over production.Global oil prices have surged to fresh highs after increased tensions between Turkey and Kurdish rebels in northern Iraq and concerns over production.
US light, sweet crude was trading at $85.85, having touched $86 for the first time, while Brent rose $1.96 to a record $82.51. In New York, US light, sweet crude soared by $2.44 to settle at a record $86.13 while Brent crude added $2.20 to finish at $82.75.
Analysts said the rises followed reports that Turkish forces had shelled an Iraqi border village overnight.Analysts said the rises followed reports that Turkish forces had shelled an Iraqi border village overnight.
And an Opec report said that non-member nations were set to cut production. Separately, Opec said that non-member nations were set to cut production.
About 110,000 fewer barrels of oil would be produced each day by those who weren't part of the cartel, Opec said in a report.About 110,000 fewer barrels of oil would be produced each day by those who weren't part of the cartel, Opec said in a report.
Last month Opec said that it would be boosting its production by 500,000 barrels per day from the beginning of next month to cope with demand.Last month Opec said that it would be boosting its production by 500,000 barrels per day from the beginning of next month to cope with demand.
'Perceived risk''Perceived risk'
The Turkish government is now preparing a motion seeking parliamentary approval for a military incursion into northern Iraq after 13 Turkish soldiers were killed close to the Iraqi border.The Turkish government is now preparing a motion seeking parliamentary approval for a military incursion into northern Iraq after 13 Turkish soldiers were killed close to the Iraqi border.
Oil out of Northern Iraq has been erratic for some time, Linda RafieldOil analyst
Ankara estimates that 3,500 Kurdistan Workers' Party (KWP) rebels are based across the border in Iraq.Ankara estimates that 3,500 Kurdistan Workers' Party (KWP) rebels are based across the border in Iraq.
The KWP wants to see the establishment of an independent Kurdish homeland, incorporating territory in eastern Turkey and northern Iraq.The KWP wants to see the establishment of an independent Kurdish homeland, incorporating territory in eastern Turkey and northern Iraq.
Oil analyst Robert Montefusco at the Sucden brokerage in London said traders were closely monitoring the situation. Analysts said that Turkey's decision to ask for permission to pursue Kurdish rebels into Iraq fuelled fears that hostilities would disrupt oil supplies.
"There's no lost production at the moment, so it's only perceived that we could lose some production if any of the pipelines are affected in that region from Iraq," he said. "Oil out of the northern (Iraq) fields has been erratic for some time," said Linda Rafield, senior oil analyst at Platts.
"That is the main concern at the moment." "But complete disruption would definitely be bullish for this market."
The US has urged the Turkish government to show restraint.The US has urged the Turkish government to show restraint.
However, relations between Washington and Ankara are currently strained after a recent US congressional vote branding the mass killing of Armenians in 1915-17 by Ottoman Turks as genocide.However, relations between Washington and Ankara are currently strained after a recent US congressional vote branding the mass killing of Armenians in 1915-17 by Ottoman Turks as genocide.