Brent crude oil continued to climb as the week began and traded at $115.20 at 5:22 GMT on Monday morning, near a nine month high. The commodity was supported by the worsening crisis in Iraq, where the nation's oil supplies looked to be under direct threat.
The conflict in Iraq seemed to be slipping out of the government's control this weekend after Sunni militants overtook crossings to both Syria and Jordan on Sunday.
The BBC reported that an airport in Tal Afar has also fallen into the hands of rebels from the Islamic State of Iraq and the Levant, or ISIS. ISIS having a stronghold at the border crossings is considered a major threat as it will allow the group to easily transport weapons.
Rebel groups are now making their way toward the nation's capital as the US and Iran debate the best course of action. While the Obama administration has pushed for a new government in Iraq where minority groups would be well represented, Iran's Supreme Leader Ayatollah Ali Khamenei has been vocal about his opposition to any US intervention.
Meanwhile Baiji, Iraq's largest oil refinery, remained surrounded by rebel forces. The facility produces around 300,000 barrels per day and an interruption to its operations would force Iraq to begin importing oil to meet its own demands.
Promising data from China also supported Brent prices and helped restore confidence in that nation's slowly recovering economy.
China's HSBC/Markit Flash Manufacturing Purchasing Managers' Index increased to 50.8 in June, marking the first time the nation's manufacturing PMI made it above the 50 point benchmark that separates growth from contraction since December. The figure indicated that Beijing's recent “mini-stimulus” was helping to stabilize the nation's economy after months of tepid growth.
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