Oil prices inch up ahead of rig counts

The United Nations warns, meanwhile, that trouble may be brewing in northern Iraq.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Dec. 15, 2017 at 10:15 AM
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Dec. 15 (UPI) -- A very quiet day on Friday saw the price for crude oil gain modest ground as the United Nations warns of possible trouble in northern Iraq.

The U.N. High Commissioner for Human Rights said Friday it had serious concerns about stability in northern Salah al-Din province, where residential areas were bombed by unknown forces. The commission said tensions in the region, despite recent liberation from the Islamic State terror group, have been increasing steadily since an abandoned referendum for independence by the Kurdistan Regional Government. Recent clashes have left an unknown number of Kurdish and Turkmen fighters dead.

"It is not clear who is carrying out the shelling, which is reported to be coming from the mountains overlooking the area," spokeswoman Liz Throssell said in an emailed statement. "Iraqi forces are still working to discover the exact locations from which the shelling has come and the identity of those responsible."

Fighting in the region added a considerable risk premium to the price of oil when it originally escalated after the September referendum. So far, there are few indications that oil production in Iraq or inside Kurdish territory has been disrupted.

The price for oil has been volatile this week after a string of competing data painted a mixed picture on U.S. crude oil production gains and global demand. About 40 percent of what comes out of the British North Sea, meanwhile, is still restricted because of a crack on the Forties pipeline system.

The price for Brent crude oil, the global benchmark carried through that network, was up 0.38 percent as of 9:20 a.m. EST to $63.55 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 0.56 percent to $57.36 per barrel.

Brent has enjoyed a considerable premium over WTI for much of the year, giving U.S. oil a competitive edge in its second year on the open market. That edge could diminish if the spread, or difference, continues to narrow.

The price of oil could react later in the day to a weekly report on exploration and production from drilling services company Baker Hughes. Any gains, particularly in North America, could be indicative of future production gains.

U.S. oil production has muted some of the impact from an effort by the Organization of Petroleum Exporting Countries to balance a market with production cuts. Total U.S. oil production estimated at 10 million barrels per day for next year would break a 47-year-old record if it's accurate.

The rest of the trading year may be quiet as market-watchers take holiday leave.

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