Brent headed for the first weekly decline since violence erupted this month in northern Iraq as the crisis has so far spared oil output from Organization of the Petroleum Exporting Countries (OPEC)’s second-largest producer.
Futures were little changed in London and poised for a 1.5% weekly loss.
Iraqi forces held the Baiji oil refinery in the north of the country after repelling the latest attack by Islamist militants. Fighting has not spread to Iraq’s south, home to more than three-quarters of its production.
“We haven’t seen any real escalation, and there is still oil coming out of the south of the country,” said David Lennox, a resource analyst at Fat Prophets in Sydney.
“Oil will probably continue to drift lower.”
Brent for August settlement was at $113.03 a barrel on the London-based ICE Futures Europe exchange, down 18 cents. Prices are poised for the biggest weekly decline since March. The volume of all futures traded was about 61%below the 100-day average.
The crude surged 4.4% for the week ended June 13 as fighters from the Islamic State in Iraq and the Levant captured the northern city of Mosul and advanced south toward Baghdad. The nation pumped 3.3million barrels last month, more than any other OPEC producer except Saudi Arabia, according to analyst data.
Iraq’s crude exports will accelerate next month, Oil Minister Abdul Kareem al-Luaibi said on June 25, adding to signs that country’s production remains undisturbed in the south.