Brent crude climbed back towards $115 a barrel on Tuesday on continued fighting in Iraq, supply disruptions in Libya and expectations of a decline in U.S. crude inventories.
Brent prices resumed their upward trend, after falling from last week's nine-month high on profit-taking, as Sunni militants continued their advance against Baghdad's Shi'ite government. Although refineries in the southern regions, which produce the bulk of Iraq's oil exports, were unaffected, analysts expect fighting in OPEC's second-largest producer to continue to support prices.
Oil prices spiked in the wake of the Iraqi conflict, which has killed more than 1,000 people, mainly civilians, in less than three weeks, according to the United Nations.
Brent crude rose 50 cents to trade over $114, still below a nine-month top of $115.71 reached last Thursday. The benchmark closed 0.6 percent down on Monday, it's biggest drop since May 16, as Iraq supply worries eased.
U.S. crude fell 14 cents to end the session at $106.03 a barrel, after dropping 1 percent in the previous session, its biggest slide since late May.
In Libya, an oil port that had reopened over the weekend closed again. The country's production is around 270,000 bpd, a fraction of the 1.6 million bpd it produced before the 2011 civil war. Still, OPEC is ready to pump extra oil in the event of any supply disruptions caused by the fighting in Iraq. Saudi Arabia, OPEC's biggest producer, can ramp up to its full capacity of 12.5 million bpd if needed, officials said on Tuesday.
Aside from geopolitical supply risks, the market is keeping watch on the latest surveys of U.S. oil inventories. A Reuters survey forecast U.S. crude inventories fell 1.3 million barrels on average last week, while product stockpiles rose.
--By Reuters. For more information on commodities, please click here.