Brent oil rises above $113 amid Iraqi insurgency

BRENT crude rose above 113 dollars per barrel on Monday as Sunni insurgents advanced in Iraq which intensifies concerns over a potential disruption to oil exports from the second-largest OPEC producer.
The sudden eruption of violence in Iraq led to a sharp spike in prices last week with both Brent and U.S. crude gaining over four per cent.
"It's a bit calmer now because people realise the militants are not just going to just roll right into Baghdad.
``It looks like the country is headed to civil war, which will mean… higher …oil prices," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
"This may not mean a stop to Iraqi exports immediately, but it probably will affect the Iraq's ability to increase their production rate," he said.
Brent crude for August delivery rose 61 cents to 113.07 dollars a barrel.
The July contract, which expired on Friday, settled 39 cents higher at 113.41 dollars per barrel, the highest since Sept. 9.
U.S. oil climbed 44 cents to 107.35 dollars per barrel.
On Friday, it rose as high as 107.68 dollars before settling up 38 cents at 106.91 dollars per barrel, the highest level since Sept. 18.
Sunni insurgents on Sunday seized a mainly ethnic Turkmen city in northwestern Iraq on Sunday after heavy fighting, solidifying their grip on the north.
Yet for the moment threat to Iraq's oil supplies remains limited, analysts and consultants say.
Northern exports have run at a trickle for months, and few had expected a rapid recovery.
President Barack Obama said on Friday he needed several days to determine how the United States would help Iraq deal with the Islamists' stunning advance.
In Libya, its western El Feel oil field has resumed production after security guards ended a protest that lasted more than two months, oil ministry officials said.
However, many oil fields and ports remain blocked.
Production at El Feel will reach 80,000 barrels a day within 24 hours, an official said on Sunday.
The Organization of the Petroleum Exporting Countries will have to produce a million barrels per day more oil in the second half of 2014 to balance the global market.
The market will see a steep seasonal spike in demand, the International Energy Agency (IEA) said.
The IEA said in its monthly report it had raised its estimate of the demand for OPEC crude oil in the second half of this year by 150,000 bpd.
Its forecast last month was an average of 30.9 million bpd. (Reuters/NAN)