Oil prices rise on Iraq conflict, upbeat China data

In this Tuesday, June 17, 2014 image taken from video uploaded to a pro-militant social media account, which has been authenticated based on its contents and other AP reporting, smoke rises after an attack by al-Qaida-inspired Islamic State of Iraq and the Levant militants on the country’s largest oil refinery in Beiji, some 250 kilometers (155 miles) north of the capital, Baghdad, Iraq. Iraqi security forces battled insurgents targeting the country’s main oil refinery and said they regained partial control of a city near the Syrian border Wednesday, trying to blunt a weeklong offensive by Sunni militants who diplomats fear may have also seized some 100 foreign workers. (AP Photo/pro-militant social media account via AP video)
Copyright 2014, The Associated Press

HONG KONG (AP) — The price of oil rose Monday, with global crude hovering near a nine-month high, after Islamic militants captured more territory in Iraq and a report on Chinese manufacturing indicated that the No. 2 economy is on the mend.

In a blitz through Iraq's western desert over the weekend, the insurgents captured four towns and three border crossings on the country's frontiers with Jordan and Syria, greatly expanding territory under their control in the country's north.

"Any spillovers of fighting into the oil-producing southern parts of Iraq will likely take oil, in particular the Brent prices (already buoyed at US$115 a barrel) up by another leg," Mizuho Bank analysts in Singapore said in a report.

Brent crude, used to price international oils, jumped 63 cents to $115.44 a barrel in London, close to last Thursday's $115.71, its highest level since Sept. 9 last year.

Benchmark U.S. crude for August delivery rose 34 cents to $107.17 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 78 cents to settle at $106.83 on Friday.

The early version of HSBC's monthly China manufacturing survey showed activity expanded for the first time this year, indicating that the slowdown in the country's economy is bottoming out, which would lead to increased energy demand.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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