West Texas Intermediate crude traded near a nine-month high as the violence in Iraq has so far spared the country’s main oil-producing region.
WTI and Brent were little changed after capping the biggest weekly gain in 2014. Iraq’s military pummeled the positions of Sunni Muslim insurgents who have captured large chunks of territory north of Baghdad. The fighting hasn’t spread to the south, which the U.S. Energy Information Administration says is home to three-quarters of Iraq’s crude output.
“The uncertainty about what could happen in Iraq is driving a lot of fear into the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “But a lot of geopolitical risk has already been priced in. We need to see the fundamentals tighten to propel oil higher.”
WTI for July delivery rose 12 cents to $107.03 a barrel at 10:17 a.m. on the New York Mercantile Exchange. The contract climbed to $106.91 on June 13, the highest close since Sept. 18. The volume of all futures traded was 24 percent higher than the 100-day average for the time of day.
Brent for August settlement gained 21 cents to $112.67 a barrel on the London-based ICE Futures Europe exchange. Volume was 8.6 percent above the 100-day average. The European benchmark crude traded at a premium of $6.31 to WTI on ICE.