Financial News

  • 24 June 2014, 9:18

Iraq Crisis Hits Airlines And Travel Firms

Airline and travel companies have seen their share prices fall in the wake of the latest violence to hit oil exporter Iraq.

EasyJet, IAG and TUI Travel, operators of fuel-hungry aeroplanes, all saw their share prices fall on Monday.

The cost of a barrel of Brent Crude - used to price international oil - jumped sharply a couple of weeks ago when trouble first flared.

But it has now risen even further to stand at above $115, close to Thursday's high and nearing the $115.71 reached on September 9 last year.

"Any spillovers of fighting into the oil-producing southern parts of Iraq will likely take oil, in particular the Brent prices, up by another leg," Mizuho Bank analysts said.

Iraq is oil cartel Opec's second largest oil producer, pumping out more than three million barrels a day.

Global oil prices are close to breaking the nine-month high as Islamic State in Iraq and Syria (ISIS) militants took four more towns in western Iraq.

ISIS also took a border crossing into Syria on Saturday, amid reports indicating another crossing into Syria.

Sunni tribesmen have taken a border crossing in Jordan to stop it falling to ISIS.

Further pressure to oil prices on Monday came from China, as a report indicated increased output from its manufacturing sector.

HSBC's monthly China manufacturing survey showed activity expanded for the first time this year, indicating that the slowdown in the country's economy is bottoming out, which would lead to increased energy demand.

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