- POSTED: 17 Jun 2014 05:25
US oil traded little changed at nine-month peaks, while Brent rose modestly as investors watched the unfolding sectarian conflict in Iraq for signs it could disrupt oil supplies.
NEW YORK: US oil traded little changed on Monday at nine-month peaks, while Brent rose modestly as investors watched the unfolding sectarian conflict in Iraq for signs it could disrupt oil supplies.
US benchmark West Texas Intermediate for July delivery slipped one cent to $106.90 a barrel.
In London, Brent North Sea crude, which tends to react more to international geopolitical factors than WTI, rose 48 cents to settle at $112.94 a barrel. It was the first day of trade of the futures contract for August delivery.
Both benchmarks had closed at nine-month highs Friday as traders eyed escalating violence in Iraq, OPEC's second-biggest crude exporter.
The lightning advance of Sunni extremists from the Islamic State of Iraq and the Levant across Iraq that began a week ago has drawn near the Shiite-led government in Baghdad.
The offensive has taken control of territory in the north of the country, where the relatively small output has been off the market since March due to violence.
On Monday, the fear that the insurgency could spread to the south, where most of Iraq's oil infrastructure is located, was already baked into the market price, said Bart Melek of TD Securities.
"As long as the army holds its position and unless we see insurgency further south already, there does not seem an immediate threat" to Iraq's production of 3.3 million barrels a day, he said.
James Williams of WTRG Economics warned of a worse-case scenario that would see all Iraqi output blocked.
"If it were all cut off there is not enough spare capacity in the world to replace the supply if you use the EIA numbers," he said, referring to the US Energy Information Administration.
"We can only wait for developments in Iraq to determine the impact. So far prices moved more on the actual rather than anticipated impact of this civil war."