Oil rises to $66

Friday, 22 May 2015 00:00 - - {{hitsCtrl.values.hits}}

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London (Reuters): Oil rose for a second day on Thursday and briefly reached $ 66 a barrel, supported by expectations that a global supply glut is starting to ease and by fighting in Iraq.

The US Government’s supply report on Wednesday showed crude inventories declined for a third week. Stockpiles had been at record levels due to excess supply, raising concern that storage tanks could fill up.

Brent crude hit $ 66 a barrel and by 1253 GMT was up 49 cents at $ 65.52. US crude gained 49 cents at $ 59.47.

“Brent is getting a bit of impetus from the threat Islamic State is posing in Iraq,” said Christopher Bellew, senior broker at Jefferies Bache. “I can see prices moving up further from here on geopolitics towards $ 70.”

In Iraq, the city of Ramadi fell to Islamic State on Sunday in the most significant setback for Iraqi security forces in nearly a year. On Thursday, Iraqi forces said they thwarted a third attempt by the militants to break through their defensive lines east of the city.

Such attacks raise concern about the stability of oil flows from Iraq - OPEC’s second-largest producer - but the insurgency has yet to affect its exports.