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Brent jumps to 13-year high in Q3 over Turkish-Kurd face-off

Kurdistan still threatening to halt up to 600,000 barrels per day of production from the semi-autonomous region

Reuters  |  Amsterdam 

Brent crude
Workers look at a drilling rig of the Rosneft-owned Prirazlomnoye oil field outside Nefteyugansk, Russia | Photo: Russia

Oil edged higher on Friday as tensions around Iraqi threatened the region's supplies, helping to their strongest third-quarter performance since 2004.

Global benchmark Brent was up 1 cent at $57.42 a barrel at 1122 GMT, notching up a third-quarter gain of around 20 percent.

The contract had reached its highest in more than two years earlier in the week, resulting in a fifth consecutive weekly gain. This performance is Brent's longest weekly bull run since June 2016.

U.S. traded flat at $51.56 a barrel, on track for its strongest third quarter in 10 years and its longest streak of weekly gains since January.

"remain firm with the backdrop of tensions between Iraq/Turkey/Iran and still threatening to halt up to 600,000 barrels per day of production from the semi-autonomous region," said Jamie Campbell, head of natural resources at Panmure Gordon.

Iraq's Kurds endorsed secession by nine to one in a referendum on Monday that has angered Turkey, the central government in Baghdad, and other powers, who fear the vote could lead to renewed conflict in the oil-rich region.

Turkish President called the vote illegitimate and has threatened to break with past practice and deal only with the Baghdad government over oil exports from

"No rapid solution to the crisis can be expected, which should continue to lend support to the oil price," analysts at Commerzbank wrote.

Most oil that flows through a pipeline from to comes from sources and a cut-off would severely damage the Regional Government, which relies on sales of for almost all its hard

So far, oil flows through the pipeline have been normal.

Oil price gains have also been supported this month by an anticipated renewed demand from U.S. refiners that were resuming operations after shutdowns due to Hurricane Harvey.

Even more bullish views have already started to appear in the oil options market that has seen a spike in activity at $100 a barrel, indicating some oil bulls are betting the price could trade around that level by this time next year.

However, Middle Eastern oil producers are concerned the recent price rise will incentivise more U.S. shale production and push prices lower again.

First Published: Fri, September 29 2017. 19:36 IST