Brent crude rose on speculation that prices dropped more than justified given threats to supply, sending the North Sea grade’s premium to West Texas Intermediate to a one-week high.
Futures advanced from a three-month low in London. The eastern Libyan port of Brega was closed even as rebels committed to keeping two other terminals in the region open.
Fighting between government forces and rebels continues in northern Iraq and Ukraine accused Russia of escalating support for rebels Monday. WTI touched a two-month low Monday.
“Brent’s bouncing a bit after weakening significantly,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Conn. “We keep hearing of the improvement in Libya but have yet to see the barrels on the market. The geopolitical premium has for the most part been erased but the problems in Iraq and Ukraine continue to simmer.”
Brent for August settlement advanced 35 cents, or 0.3 percent, to $107.01 a barrel on the London-based ICE Futures Europe exchange at 9:14 a.m. in New York.
The contract dropped $2.01 to $106.66 on July 11, the lowest close since April 7. Prices are down 3.4 percent this year.
WTI for August delivery decreased 16 cents to $100.67 a barrel on the New York Mercantile Exchange. Futures touched $100.26, the lowest level since May 12. The grade has advanced 2.3 percent this year.
The European benchmark traded at a $6.34 premium to WTI, up from $5.83 on July 11 and the highest since July 7 based on closing prices.
Brent fell last week as the Sharara field resumed and two oil-export terminals reopened in Libya.
Rebels seeking self-rule in eastern Libya said they’re committed to an agreement to reopen Es Sider, the country’s biggest oil port, distancing themselves from a protest that shut a smaller facility, Brega. Es Sider has the capacity to load 340,000 barrels a day, according to the Oil Ministry.
Brega, which was reported July 12 to have been shut by guards seeking better pay, can export 60,000 barrels a day, according to the Oil Ministry.
Although located in eastern Libya, Brega was not among the four ports that fell under the rebel group’s control a year ago, and it continued to supply a refinery controlled by the government in the western region.
Production from the country climbed to 470,000 barrels a day, state-run National Oil Corp. spokesman Mohamed Elharari said by phone in Tripoli on Sunday.
The nation pumped 300,000 barrels a day in June, ranking it as the smallest producer in the Organization of Petroleum Exporting Countries, data compiled by Bloomberg show.
In Iraq, OPEC’s second-largest producer, fighting remains concentrated in the north, where militants from a breakaway al- Qaeda group known as the Islamic State captured the city of Mosul last month. The conflict hasn’t spread to the south, the source of more than three-quarters of the country’s oil output.