The price of oil continued to climb Friday, nearing $107 a barrel as Iraq's widening insurgency fueled concerns that crude supplies from OPEC's No. 2 producer could be hurt.
After jumping over $2 on Thursday, the benchmark U.S. oil contract for July delivery was up another 44 cents to $106.97 a barrel in electronic trading on the New York Mercantile Exchange. It had earlier hit a high of $107.68.
Brent crude, a benchmark for international oils, was up 54 cents to $112.96 a barrel on the ICE Futures exchange in London.
Oil prices have risen to 10-month highs after an
al-Qaida-inspired group vowed to march on Baghdad after capturing
two key Iraqi cities this week, including Mosul, which is in an area
that is a key gateway for the country's crude.
The violence in Iraq is mostly centred in the country's north, away from the major oil-producing regions of the south. The turmoil hasn't yet had a big effect on oil exports, though it raises concerns about whether Iraq can continue rebuilding its oil infrastructure and boost output to meet global demand.
``Without the oil production from the south of Iraq, the market would be stripped of an estimated 2.5 million barrels per day,'' said a report from analysts at Commerzbank in Frankfurt. ``The sharp price rise in the last two days shows that this oil supply is no longer viewed as secure, either.''
Iraq's oil production has risen by about a fifth since 2011 to 3.3 million barrels per day, making it the second biggest producer in OPEC behind Saudi Arabia.
In other energy futures trading on Nymex:
_ Wholesale gasoline advanced 0.27 cent to $3.0864 a gallon.
_ Natural gas added 0.8 cent to $4.77 per 1,000 cubic feet.
_ Heating oil was up 1.46 cents to $3.0039 a gallon.