Oil prices rise on Mideast violence, but …
May 18, 2015, 2:54 pm

Saudi Arabia appeared to be reiterating an earlier statement made by OPEC Secretary-General Abdalla Al-Badri, that market factors will be allowed to determine prices [Xinhua]

In Asian and European trading, Brent Crude rose to just over $67 and US crude rose to just shy of $60

Overnight, fighters belonging to the Islamic State of Iraq and the Levant (ISIL, or ISIS) overran government positions in the key town of Ramadi, capital of the war-torn Anbar province.

The loss of Ramadi is a severe blow to the Iraqi government in Baghdad.

Fighting also broke out in Yemen as a humanitarian ceasefire that went into effect last week came to an end when Saudi Arabia resumed air strikes against Houthi rebels.

This has raised market fears that the violence in Iraq and Yemen could disrupt oil flow.

Speculation in energy markets comes ahead of an OPEC meeting, which experts say will be critical in determining which way prices go.

But if there are any prospectors waiting for production to be cut, quotas lowered and prices to rise, they may have another thing coming.

OPEC member Iran’s deputy oil minister told reporters on Monday that it is unlikely OPEC oil ministers meeting on June 5 will take the decision to cut production.

In fact, some oil-producing heavyweights such as Saudi Arabia, Iraq and Kuwait may have actually increased production in the past few months.

The current quota for the 12-member OPEC oil cartel was set at a sum of 30 million barrels a day in 2011. OPEC production in April 2015 was just short of 31 million barrels a day.

But Libya, which has resuscitated its production levels upward, and Iraq, have both increased their output. Iran has said it wants to increase its output, too.

Saudi Arabia, which maintains much influence in OPEC, said it would rather let markets dictate prices than implement a policy to raise or lower output.