Oil prices rise on Iraq worries

Oil prices surged Thursday on escalating tensions across northern and central Iraq, an important oil producer in the Organization of Petroleum Exporting Countries (OPEC).

Reports said that Iraq militants took control of the northern oil hub of Kirkuk and halted repairs to the main pipeline from the Kirkuk oil field to Turkey, threatening the crude output of the country.

Iraq is the second largest crude producer in the OPEC after Saudi Arabia, producing about 3.5 million barrels crude a day.

Analysts said that the crude market is moving up on the geographic risks.

The OPEC reaffirmed its production target of 30 million barrels a day at the Vienna meeting Wednesday, a decision widely-expected. OPEC supplies about 40 percent of the world's crude.

On the U.S. economic front, the number of Americans who initially applied for jobless benefits in the week ending June 7 increased 4,000 to 317,000 on a seasonally adjusted basis, the Labor Department said.

Light, sweet crude for July delivery rose 2.13 U.S. dollars to settle at 106.53 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery gained 2.93 dollars to close at 112.88 dollars a barrel.