Brent pared gains as Islamist militants fought Iraq’s government for control of a northern refinery, while the main southern oilfields in OPEC’s second-biggest producer were spared. West Texas Intermediate rose amid forecasts that U.S. oil stockpiles fell.
Futures gained as much as 40 cents in London. The Baiji refinery in northern Iraq was damaged as Islamist militants fought with the army for control of the country’s largest crude-processing plant. U.S.crude inventories probably slid by 750,000 barrels last week, a Bloomberg News survey showed before an Energy Information Administration report today.
“The situation in Iraq is so volatile now that things can move it quite quickly,” Nic Brown, head of commodities research at Natixis SA in London, said by phone. “While the country’s main oil fields are in the south, Baghdad is not, and, if there are any attacks there, that could hurt the Iraqi government.”
Brent for August settlement rose as much as 0.4 percent to $113.85 a barrel on the London-based ICE Futures Europe exchange, before falling to $113.67 at 1:42 p.m. The contract rose 51 cents to $113.45 yesterday, the highest close since Sept. 9. The volume of all futures traded was about 2.8 percent above the 100-day average for the time of day. Prices have increased 2.6 percent this year.
WTI for July delivery was 33 cents higher at $106.69 a barrel in electronic trading on the New YorkMercantile Exchange. Brent was trading at a premium of $7.50 a barrel to WTI on ICE.
Exports of Basrah Light, southern Iraq’s main crude, may reach about 2.8 million barrels a day next month, according to a preliminary loading plan obtained by Bloomberg News on June 16. That would be near February’s record level of shipments, which was the last month Iraq shipped Kirkuk grade crude via a pipeline to the Mediterranean. The fighting hasn’t spread to the south, which the EIA estimates is home to three-quarters of Iraqi output.
Source: Bloomberg
