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Brent crude oil rose to the highest since the start of March and West Texas Intermediate to an eight-month high as violence escalated in Iraq, the second-largest producer in OPEC.
Brent rose as much as 2.2 percent to $112.34 a barrel. WTI, the U.S. benchmark, advanced 2 percent. Militants linked to al-Qaeda extended control over Iraq’s second-biggest city and battled for energy infrastructure, including the nation’s largest refinery. U.S. planes may bomb northern Iraq, Oil Minister Abdul Kareem al-Luaibi said today in Vienna.
“The Iraq development is the main driver for oil prices today and increases nervousness over the security of supply from the country,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by phone today. The possibility of U.S. intervention in Iraq “is another sign of how desperate the situation is and how weak the government has become.”
Brent for July settlement rose by as much as $2.39 and was at $112.09 a barrel at 1:57 p.m. on the London-based ICE Futures Europe exchange. The contract expires tomorrow. The European benchmark crude traded at a premium of $5.79 to WTI. The spread widened yesterday for the first time in four days to close at $5.55.
WTI for July delivery climbed as much as $2.13 to $106.53 a barrel in electronic trading on the New York Mercantile Exchange. WTI traded as high as $108.99 on Sept. 19. The volume of all futures traded was about 206 percent above the 100-day average. Prices have increased 8 percent this year.
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