Brent is still trading above $114.50 but has given back 50 cents from its highs of the day. Over the last seven trading days we have seen Brent add almost $7 to its price, a gain of almost 6.5%. On the relative strength index it has spent the last four days in overbought territory. The driving force behind this has been the escalation in Iraq, and more broadly the Arabian Gulf.
Having seen the majority of allied forces leave the country, Iraq has once again descended into chaos and bloodshed. The situation has become so bad, so quickly, that even Iran and the US are discussing in unison how they can implement stability.
The US has instructed its carrier fleet to head towards the gulf and president Barak Obama has already publicly stated that he would not need congressional approval for actions that might be required.
Iraq had once again climbed to the status of the second largest contributor of OPEC supply, and with its largest oil field currently being fought over by government forces and rebels, fears have increased that global supplies may be disrupted.
Brent is now less than a dollar away from its August 2013 highs which might offer some resistance, but it feels very much like there will need to be a turn in events on the ground to halt its rise higher.