Spared Iraq output pushes Brent to first weekly drop

Brent headed for the first weekly drop since violence erupted in Iraq amid speculation that oil output would remain safe in OPEC’s second-biggest producer. West Texas Intermediate was steady in New York.

Futures were little changed in London and down 1.2 percent from June 20, the biggest weekly drop since April. Iraqi forces held the Baiji refinery in the north after repelling the latest attack by Islamist militants. Fighting has not spread to the south, home to more than three-quarters of the nation’s oil production. US crude stockpiles increased for the first time since May, according to the Energy Information Administration.

Brent for August settlement was at $113.37 a barrel on the London-based ICE Futures Europe exchange, up 16 cents, at 1:12 p.m. London time. The volume of all futures traded was about 48 percent below the 100-day average for the time of day. Prices have climbed 2.3 percent this year.

WTI for August delivery was little changed after earlier sliding as much as 36 cents to $105.48 a barrel in electronic trading on the New York Mercantile Exchange. Prices are down 1.3 percent. The US benchmark crude was at a discount of $7.48 to Brent on ICE, compared with $7.98 on June 20.

Brent has gained 3.6 percent in June as fighters from the Islamic State in Iraq and the Levant captured the northern city of Mosul and advanced south toward Baghdad. Iraq pumped 3.3 MMbopd last month, trailing only Saudi Arabia in the Organization of Petroleum Exporting Countries. 

In the US, crude inventories expanded by 1.74 MMbbl to 388.1 million, the EIA, the U.S. Energy Department’s statistical arm, reported on June 25 2014.