After months of range-bound trading during which Opec-led supply cuts supported crude values but rising USA output capped markets, prices have moved up significantly this month.
Meanwhile, West Texas Intermediate crude rose by 19 cents to Dollars 52.07 while global benchmark Brent was up 37 cents at USD 58.25 a barrel.
The ongoing political friction between the USA and Iran also increased the global risk for oil. "If they are, we expect that several hundred thousand barrels of Iranian exports would be immediately at risk", analysts at Goldman Sachs said in a research note published Tuesday. U.S. West Texas Intermediate crude futures dropped 0.64% to $50.97 a barrel.
In any case, Kirkuk is not in the territorial zone of the autonomous Kurdish area, whose leaders recently won a referendum on national independence from Iraq.
The common explanation given today by most analysts for the rise in Crude Oil is the military clash between Kurdish and Iraqi army forces near Kirkuk, an important oil producing region in northern Iraq.
Overnight, crude oil prices settled higher on Wednesday after OPEC said demand for oil is set to increase in 2018 raising investor expectations that higher demand will rein in excess supplies. U.S. President Donald Trump on October 13 refused to certify Iran's compliance over a nuclear deal, leaving Congress 60 days to decide on further action against Tehran.
Even though latest U.S. inventory data has shown stockpiles declined by more than 7m barrels last week, prices remained rangebound.
If no other countries support the USA push for more sanctions, Iran's production is unlikely to drop by 1 million bpd, according to Goldman.
On the issue of balance, Total CEO Patrick Pouyanne said Wednesday at an oil and financial conference in London that the OPEC balancing effort was working well, as evidenced by the steady draw on global crude oil inventories.
Australian shares .axjo extended their winning streak to a fourth straight session to rise 0.6 percent, while Japan's Nikkei .n225 rallied for a sixth day to the highest since November 1996. The Persian Gulf nation said it would support an extension of OPEC output cuts to the end of 2018 and insisted its production plans won't be disrupted by U.S. President Donald Trump's disavowal of the nuclear deal that's boosted its exports. It last stood at $7,110.5.