• Saturday, February 24, 2024
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Brent Oil halts longest drop since August on Iraq unrest

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Brent crude halted its longest run of declines since August on concern that clashes between Iraq’s government and Al-Qaeda-linked militants may disrupt oil output.

Futures rose as much as 0.7 percent, ending a five-day losing streak, amid fighting in the city of Fallujah and surrounding Anbar province in Iraq, the largest crude-producing OPEC member after Saudi Arabia . German unemployment fell for the first time in five months in December, signaling increased confidence by companies in Europe’s largest economy.

“The proximate cause of the move higher is the deteriorating security situation in Iraq,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Very rarely does the market trade lower more than five days. We’re consolidating after a big selloff.”

Brent for February settlement rose 43 cents, or 0.4 percent, to $107.16 a barrel on the ICE Futures Europe exchange at 10:47 a.m. in New York on Tuesday. The volume of all futures traded was 7.7 percent below the 100-day average.

West Texas Intermediate crude for February delivery increased 49 cents, or 0.5 percent, to $93.92 a barrel on New York Mercantile Exchange. The volume of all futures traded was 16 percent lower than the 100-day average.

Brent oil, the European benchmark grade, traded at a $13.24 premium to WTI. The spread widened for a fifth day yesterday to close at $13.48.

Sunni Muslim fighters in Anbar province vowed to fight off an effort by government forces to regain control of towns in the region that Prime Minister Nouri al-Maliki says are under the sway of al-Qaeda. Iraq pumped 3.2 million barrels of crude a day in December, making it the second-largest producer in the Organization of Petroleum Exporting Countries, according to a Bloomberg survey.