Oil in its peak as Turkey pushes for Cross Border Operation

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Oil hit a record over $84 a barrel Friday on mounting tensions between Turkey and northern Iraq and lingering supply concerns ahead of the Northern Hemisphere winter. US crude rose 68 cents to $83.76 a barrel after trading up to a record $84.05 a barrel earlier. London Brent crude climbed 56 cents to $80.71.

 

Prices jumped after the terrorist organization Kurdistan Workers Party (PKK) said it would move back into Turkey from northern Iraq and target the Turkish government, highlighting tensions in a region that pumps a third of the world’s oil. 

Iraq’s oil exports through Turkey have been virtually idle since the US-led invasion of Iraq in March 2003 due to sabotage attacks and most of Iraq’s oil is exported from the country’s south. But the rising tensions added to simmering worries of a supply crunch during the Northern Hemisphere winter after declines in US and European fuel inventories. 

Markets were also eyeing escalation tensions between Washington and Ankara, a crucial ally for the United States which relies on Turkey as a logistical base for the Iraq war. Turkey’s Prime Minister Recep Tayyip ErdoÄŸan said relations between Turkey and the United States are in danger over a US resolution branding teh forced emigration of Armenians by Ottoman Turks during World War One as genocide.

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