Geopolitical factors causing oil price spike

July 12, 2013 at 8:06 AM

PARIS, July 12 (UPI) -- Political upheaval in the Middle East is largely responsible for some of the increase in oil prices on the global market, a market assessment from Paris said.

Crude oil prices topped $100 per barrel last week for the first time since September as the Egyptian government of Mohamed Morsi collapsed under military and public pressure. While Egypt is not a major oil supplier, the situation there may be a vehicle for further political tensions across the oil-rich Middle East.

Bloomberg News reports a Friday price for Brent crude oil of $108.02 in early morning trading.

The International Energy Agency said in a monthly market report published Thursday the upheaval in Egypt and disruptions in Iraq, Libya and Nigeria were contributing to the spike in energy prices.

Global oil supplies declined by 300,000 barrels per day in June to 91.2 million barrels. This was largely because of declines in production from members of the Organization of Petroleum Exporting Countries. Non-OPEC supply, however, is expected to increase.

The IEA said the overall global economic outlook remains positive. It said it expected global oil demand to grow by 1.2 million barrels per day next year as world economies emerge from recession.

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