Oil prices surged more than $1 a barrel to new intraday highs Tuesday on fears Turkey will pursue Kurdish rebels into Iraq and disrupt oil supplies in the region.A weak U.S. dollar, low U.S. crude inventories and increased buying by investment funds also supported prices, counterbalancing expectations of higher inventories in the weekly U.S. supply report.
The Turkish government’s decision Monday to ask Parliament for permission to pursue Kurdish rebels into Iraq stoked concern about potential interruptions to oil supplies.
“Whenever there is any escalation in political tensions in the Middle East, oil markets become concerned,” said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. “There is production and there are pipelines that people worry may be affected if there are any issues in Iraq.”
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