Oil Prices hold on the back of supply worries and increasing demand

Oil prices rose on Monday after supply worries from Middle East continue to mount as news reports hint at clashes between the Iraqi Armed Forces and Kurdish authorities. Last week, Iraq after a brief standoff captured oilfields from the city of Kirkuk, Kurdistan and halted the production temporarily.

Over the weekend, Iraqi authorities asked petroleum giant BP to start their operations in the field.  

Brent crude futures, the international benchmark for oil prices, were at $57.84 at 0056 GMT, up 9 cents, or 0.16 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $52.03 per barrel, up 19 cents, or 0.37 percent.

Oil prices have been continuously above the 50 $ mark, as supply worries, OPEC production tightening and the increasing demand help prop up the prices in the recent months.

Adding to the positive momentum in prices is the declining number of US Shale gas rigs; the amount of U.S. oil rigs drilling for new production fell by seven to 736 in the week to Oct. 20, the lowest level since June.

However, much of the impetus to sustain this level must come from increase in demand. In the main growth areas of Asia, consumption remains high especially in India and China; two of the world’s top three importers of crude. India imported a record 4.83 million barrels per day (bpd) of oil in September as several refiners resumed operations after extensive maintenance to meet rising local fuel demand.