Brent crude rose by the most in three sessions after a car bomb exploded in the Kurdish region of Iraq, OPEC’s second-largest producer. West Texas Intermediate also gained in New York.
Futures climbed as much as 1.3 percent in London. At least five people were killed when a car bomb exploded outside the governor’s office in Erbil, capital of the Kurdish region, according to Iraqi media. The attack may be the start of a more sustained campaign of retaliation by Islamic State against Kurdish fighters, said Nihat Ali Ozcan, an analyst at the Ankara-based Economic Policy Research Foundation.
“The Iraq bomb looks to have pushed prices up as there isn’t much out there supporting the bullish scenario otherwise,” Abhishek Deshpande, oil markets analyst at Natixis, said by e-mail. “It will be short-lived as markets are still flooded with oil.”
While Kurdish forces have been at the forefront of the fight against Islamic State militants, Erbil has been spared the worst of the violence that has gripped the country. The Kurdish region pumped 420,000 barrels a day of crude last month, according to estimates from the International Energy Agency.
Brent for January settlement rose as much as 98 cents to $79.45 a barrel on the London-based ICE Futures Europe exchange and was at $79.29 at 1:28 p.m. local time. Trading volume was 3 percent below the 100-day average for the time of day. Prices have decreased 28 percent this year.