West Texas Intermediate crude headed for the biggest weekly advance since December and Brent gained as escalating violence in Iraq threatened supplies from OPEC’s second-largest oil producer.
Futures pared gains after earlier rising 1.1 percent in New York. Iraqi Oil Minister Abdul Kareem al-Luaibi speculated that U.S. planes may bomb his nation’s north as militants linked to al-Qaeda, that captured the city of Mosul this week, moved south toward Baghdad. Events in Iraq highlight the risks to oil supply from the nation, which is forecast to provide about 60 percent of OPEC’s output growth in the rest of this decade, the Paris-based International Energy Agency said.
“There has been some positioning for the potential for supply disruptions in Iraq,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH, said by phone. “It’s a major supplier.”
WTI for July delivery gained as much as $1.15 to $107.68 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.83 at 1:04 p.m. London time. The contract rose $2.13 to $106.53 yesterday, the highest close since Sept. 18. The volume of all futures traded was more than double the 100-day average for the time of day. Prices have advanced 4.1 percent this week.