Investing.com - Brent oil futures rallied to the highest level since September on Thursday, as market players continued to monitor developments in Iraq, amid concerns over a disruption to global supplies.
On the ICE Futures Exchange in London, Brent oil for August delivery rallied to a daily high of $114.80 a barrel, the most since September 9, before trimming gains to last trade at $114.66 during European morning hours, up 0.35%, or 40 cents.
Concerns about potential supply disruptions due to fighting in Iraq lingered, as the conflict between Sunni Islamist insurgents and Iraqi army forces continued on Thursday.
According to local reports, Iraqi forces regained control of the Baiji refinery after it was captured by Sunni militants on Wednesday.
Iraq produced approximately 3.5 million barrels a day of oil last month, making it OPEC’s second-biggest oil producer behind Saudi Arabia.
Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in August tacked on 0.48%, or 51 cents, to trade at $106.07 a barrel.
The Federal Reserve cut its bond purchases by another $10 billion a month on Wednesday, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.
Despite this, the Fed also lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter. The central bank still acknowledged a broad improvement in the labor market.
The central bank said it expects the federal-funds rate, currently close to zero, to reach 1.2% by the end of next year and 2.5% by the end of 2016, a slightly faster rate of tightening than formerly expected. The forecast however did not bring forward the timing for the first rate hike.
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