Futures Movers: Oil jumps to near 3-week high as Middle East tensions escalate

Crude oil prices jumped to an almost three-week high on Monday, driven up by increased tensions in the Middle East after Iraq pushed into the oil city of Kirkuk.

West Texas Intermediate crude

CLX7, +1.38%

 rallied 65 cents, or 1.3%, to $52.10 a barrel, setting it on track for its highest settlement price since Sept. 27, according to FactSet data.

Brent for December

LCOZ7, +1.70%

 gained 71 cents, or 1.2%, to $57.88, also trading around its highest level since late September.

Last week, the U.S. oil benchmark rose more than 4%, boosted by a mix of bullish Chinese data, geopolitical risks in the Middle East and President Donald Trump’s refusal to certify Iran’s compliance with the nuclear deal.

On Monday, the risks in the Middle East intensified after Iraqi forces reportedly entered Kirkuk, which is a major oil-producing area and has been held by Kurdish fighters. Tensions between the Kurdish Regional Government and Baghdad have been building the Kurds voting for independence in a September referendum, sparking concerns over Iraq’s oil exports. Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries.

“The oil market is firmly in the grip of geopolitical risks at present,” analysts at Commerzbank said in a note, on Monday.

“In recent months we have stressed on a number of occasions that the tensions and potential effects on the production and transport infrastructure in the region pose the biggest risk to our fairly conservative price forecasts. We otherwise see the oil market as still amply supplied, which would rather justify a Brent price of $50 per barrel,” they added.

In other energy products on Monday, gasoline for November

RBX7, +1.07%

 climbed 0.9% to $1.64 a gallon, while gasoil for the same month jumped 1.7% to $543 per metric ton.

November natural gas

NGX17, -1.43%

 slid 1.3% to $2.96 per million British thermal units.