Oil prices climb after Turkey’s threat to cut crude flows from Iraqi Kurdistan

Oil prices took a breather on Tuesday after Brent crude earlier rose to a 26-month high, supported by Turkey’s threat to cut crude flows from Iraq’s Kurdistan region to the outside world. Turkish President Tayyip Erdogan threatened on Monday to cut off the pipeline that carries oil exports from northern Iraq, intensifying pressure on the Kurdish autonomous region over its independence referendum.

The pipeline to Turkey’s port of Ceyhan usually pumps between 500,000 and 600,000 barrels per day (bpd). The loss of this supply combined with the 1.8 million bpd of supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers has raised concerns of tighter supply.

The Iraqi government said it will not hold talks with the Kurdistan Regional Government about the results of the referendum, which is expected to show a comfortable majority in favor of independence after the results are announced in about 72 hours.

“The high compliance of producers in jointly curbing output as well as the news of (Turkey’s response to) the referendum helped oil prices,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.

London Brent crude for November delivery LCOc1 was up 1 cent at $59.03 a barrel by 0621 GMT after settling up 3.8 percent on Monday. Earlier it rose to $59.49, the highest since July 10, 2015.

For more see http://www.reuters.com/article/us-global-oil/oil-rises-to-26-month-high-turkey-threatens-to-cut-kurdistan-oil-pipeline-idUSKCN1C103A?utm_campaign=trueAnthem:+Trending+Content&utm_content=59ca020104d30123e1e7c92b&utm_medium=trueAnthem&utm_source=twitter