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Brent crude rose for a second day as the U.S. conducted airstrikes against militants in Iraq, OPEC's second-largest producer. West Texas Intermediate futures also gained.
Airstrikes have been launched against Islamic militant artillery, Pentagon Spokesman Admiral John Kirby said on Twitter. President Barack Obama yesterday authorized the strikes in parts of Iraq. Chevron Corp. and Afren Plc withdrew some staff from their operations in the country's Kurdish region.
"The airstrikes in Iraq seem to be shaking the market," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "We are seeing some geopolitical risk priced into the market again."
Brent for September settlement gained 41 cents, or 0.4 percent, to $105.85 a barrel at 9:18 a.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures traded was 36 percent above the 100-day average for the time of day. Prices are up 1 percent this week.
WTI for September delivery climbed 36 cents to $97.70 a barrel on the New York Mercantile Exchange in volume that was 0.7 percent below the 100-day average. The grade is little changed this week. The U.S. benchmark crude was at a discount of $8.15 to Brent after closing at $8.10 yesterday.
Obama said the strikes, if needed, would be used to protect U.S. personnel and the Yezidis, a minority sect concentrated in northern Iraq that has been targeted by militants and are stranded on a mountain. The U.S. will strike militants if they move toward the Kurdish city of Erbil, where it has diplomatic personnel, he said.
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