A sudden outburst of violence in Iraq has seen oil traders send Brent crude prices to near-nine-month highs amid fears over the country's oil supplies, but BP's chief economist says increased production in the United States will help keep oil prices relatively stable.
Both Brent and WTI were slightly higher in early Monday trade, though they also wobbled briefly into negative territory as well.
Iraq produces about 3.3 million barrels a day, and so far the only reported disruption is the flow of oil through the 600,000 barrel Kirkuk-Ceyhan pipeline, which runs from Kirkuk to Turkey. The Kirkuk fields produce about 400,000 to 500,000 barrels a day, while the major fields in the Basra area produce about 2.6 to 2.7 million barrels a day, according to IHS.
Christoph Ruehl told CNBC ahead of the release of BP's 2014 statistical review that between 2011 and 2014 we've seen the most stable oil price in a three-year period since the 1970s. U.S. shale growth matched the many supply disruptions including those caused by the Arab Spring, he said.
"What that means is that if you had only the supply disruptions to the extent we saw the last three years, you would have seen oil prices getting into upward pressure, talk of danger to the economy," he told CNBC in Moscow.
"And if you had only seen the shale production increase you would have seen people talk about pressure on oil prices, OPEC cuts... So there is a very uneasy truth about which is this perfectly coincidental balance between disruptions and growth in North America."
Ruehl said this balance explained the log-term stability in the oil price, but added it's an "eerie calm".
"Markets are sitting there on edge waiting which side will get the upper hand," he said.
BP said in its Statistical Review of World Energy that the U.S. saw one of the biggest increases in oil production the world had seen in 2013, driven by investment in shale.
Energy consumption growth was below average everywhere except North America as economic growth remained weak. EU consumption continued to decline, hitting the lowest level since 1995.