Oil futures held steady but near nine-month highs Monday, erasing or trimming earlier gains on expectations Iraq’s main oil-producing areas will remain insulated from the sectarian violence sweeping the north of the country as Sunni militants battle the Iraqi government. July crude oil fell a penny to close at $106.90 a barrel on Nymex after earlier trading above $107 a barrel, ending a three-session winning streak. Prices last week jumped 4.1%, the largest weekly percentage gain since the week ended Dec. 6. They had seen their highest settlement since Sept. 18, 2013. The August contract for Brent crude, the European benchmark, fell 8 cents, or 0.1%, to $112.86 a barrel, following gains of roughly 4% last week.
“Global oil prices have risen by a few dollars but, at around $113 for Brent, they are still close to the average of $110 since the “Arab Spring” began in 2011,” said Julian Jessop, economist at Capital Economics in London. “This makes sense. The immediate risks from the fighting in the north of Iraq are small, as the oil industry is concentrated in the south and in the Kurdish region. Indeed, help from Iran in resolving the Iraq crisis might clear the way for a further easing of Western sanctions on Iran’s energy exports,” he said.