Oil Prices Poised To Rise As Geopolitical Tension Returns

Brent crude oil was steady at $106.33 at 8:00 GMT on Monday morning with investors keeping an eye on conflict in both Libya and Iraq.

The commodity was on a downward spiral last week after Libya reopened its largest oilfield following months of protests and the conflict in Iraq looked isolated to the north.

However, this week analysts warned that prices could rise as supply interruption worries could be renewed.

CNBC reported that a bomb killed six people over the weekend in Iraq,  just 50 miles from the nation’s capital.

The Iraqi parliament has been working to form a new, more inclusive government in order to give minority groups a voice and cut their support for radical movements. However, on Sunday, the parliament said it was going to further delay its decision on the new government until Tuesday.

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The conflict in Iraq also spread to the South, where the majority of the nation’s oil is exported. Also this weekend, two southern oil fields were taken over by Kurdish forces as the Kurdish Regional Government vies for more power.

Renewed fighting in Libya also boosted Brent prices as investors worried that the nation’s efforts to ramp up exports and reopen oil fields would be short lived. Libya’s main airport was shut down on Sunday as militant groups fought among themselves for control of the airport.

At least six people were killed in the fighting and it prompted the United Nations to recall some staff from the North African nation.

Brent also found support from comments made by Secretary of State John Kerry on Sunday. Speaking about the ongoing negotiations between six world powers and Iraq, Kerry said the two sides were at odds over how to move forward.

With the deadline for a permanent agreement just a week away, many believe that the talks could collapse, resulting in the return of strict sanctions that keep Iranian oil from the markets.