Oil creeps higher as Iraq tensions ease

21 December 2009

Written by John King

Crude oil prices inched higher this morning (December 21st) as military tensions between Iran and Iraq eased.

Concern began to mount after Iranian troops took over an oil well on the border between the two countries, which Iraq considers to be part of its Fakka oilfield.

However, the Iraqi military has confirmed that the well is no longer under Iranian control.

Speaking to Reuters, Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo, said: "Although the incident leaves apprehension, it is not interfering with oil production, so it is not a factor to produce an explosive upward momentum [in prices]."

Heating oil prices also moved higher this morning while the New York Mercantile Exchange's headline crude contract headed closer to $75 (£46) a barrel.

Domestically, demand for both crude and heating oil was supported by a new cold snap hitting the country's north-eastern states. Sales of heating oil are also likely to rise in the UK this week as a cold front moves east across the country.

Click here for a home heating oil quote