Oil prices rebound after US airstrike in Iraq

Following the reports that the Obama administration is considering air strikes in Iraq, US oil prices have rallied from a six-month low.
US benchmark West Texas Intermediate for September delivery advanced US42c to $US97.34 a barrel on the New York Mercantile Exchange. European benchmark Brent oil for September delivery rose US89c to $US105.44 a barrel in London.
The gains followed reports that President Barack Obama was weighing military strikes against Sunni extremists in Iraq after they attacked a city of predominantly Iraqi Yazidis, members of an ancient pre-Muslim religious minority.
Josh Earnest, White House spokesperson would not confirm the reports that US air strikes are on the table, but said American personnel were studying conditions on the ground in cooperation with Iraqi security forces.
Gene McGillian, broker and analyst at Tradition Energy, said that the headlines on Iraq "refocused the market's attention on some of the geopolitical hotspots that previously had been the driver" of oil prices.
"We still don't have any resolution to any of the hotspots in the world."
McGillian said US oil prices have shed more than $US10 since June 13, adding, "we're approaching a bottom." Analysts say oil market fundamentals are still weak in the US as traders look ahead to lower gasoline use after the summer driving season ends.
But, the low demand picture is offset by concerns about political problems that could affect production in Iraq, Libya and Russia.