Brent crude oil approached a nine month high as fighting in Iraq continued to threaten the nation's supplies. The commodity traded at $114.50 at 8:20 GMT as investors kept an eye out for any new developments in the unfolding crisis.
Foreign companies have evacuated their workers from Iraqi oilfields as Islamist militant groups extended their stronghold across northern Iraq and set their sights on Baghdad. CNBC reported that both ExxonMobil and BP have withdrawn many of their staff in case the fighting continues to spread.
Though most of Iraq's oilfields are located in the southern part of the country and have not been directly at risk yet, many worry that the current situation could quickly develop into a full blown civil war.
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Oil prices were also supported by the US Federal Reserve's latest economic outlook for the US. The forecast was positive and showed that the bank sees the US economy strengthening through 2016. The Fed met expectations at its two day policy meeting by reducing its monthly asset purchases by a further $10 billion and recommitting to maintaining low interest rates until the economy is on solid ground.
Conflicting oil inventory reports from the Energy Information Administration and the American Petroleum Institute put some pressure on WTI crude, though. On Tuesday, the API released a report showing that US inventories were down 5.7 million barrels last week; however the more closely watched EIA report told a different story with just a 579,000 barrel draw. The EIA's version of the data fell below analysts' expectations of a 700,000 barrel decline.
See more from Benzinga
- Brent Steady Above 3 On Baiji Closing
- Brent Holding Near 3 As Crisis In Iraq Worsens
- Iraqi Oilfields Safe For Now
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