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Brent oil advances on upsurge of Libya unrest

Brent crude climbed on concern Libyan turmoil will curb the country’s oil output.

West Texas Intermediate was little changed amid speculation that supplies rose at Cushing, Okla., the delivery point for the contract.

Islamist militias seized the international airport in Tripoli, Libya, as political factions struggled to form a new government in war-torn Iraq.

Crude stockpiles at Cushing increased in the week ended Aug. 22, according to four analysts surveyed by Bloomberg.

CME Group Inc., the world’s largest futures market, halted most of its Globex platform for about four hours, suspending contracts including oil and commodities.

“The situation in Libya continues to worsen and could spiral out of control,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “Production has been picking up but it looks like things are falling apart, which is giving the market support.”

Brent for October settlement rose 36 cents, or 0.4 percent, to $102.65 a barrel on the London-based ICE Futures Europe exchange at 11:42 a.m. in New York. Prices are down 7.8 percent this year.

The volume of all contracts traded was 71 percent below the 100-day average for this time of day. Monday was a bank holiday in the United Kingdom.

WTI for October delivery declined 14 cents to $93.51 a barrel on the New York Mercantile Exchange. Volumes were 52 percent lower than the 100-day average.

Futures touched $92.50 on Aug. 21, the lowest intraday price since Jan. 15. The U.S. benchmark oil traded at a $9.14 premium to Brent, up from $8.64 on Aug. 22.

Low volume

“I wouldn’t add to any positions on a day with such low volume,” Tom Finlon, Jupiter, Fla.-based director of Energy Analytics Group LLC, said by phone. “There’s a holiday in London and many people here are on vacations. The volume was low last week and should be even lower this one.”

An alliance known as Fajr Libya, or Libya Dawn, said it wrested control of the airport from another group amid weeks of fighting that threatened to worsen security.

Egyptian Foreign Minister Sameh Shoukry said unrest in Libya risks destabilizing its neighbors.

Libyan crude production slipped to 630,000 barrels a day from 656,000 barrels Sunday, Mohamed Elharari, a spokesman at state-run National Oil Corp., said Monday by phone.

In Iraq, U.S. President Barack Obama’s bid to have Arabs take the lead in combating Islamic State suffered a setback as Sunni lawmakers quit talks on forming a new government, after Shiite gunmen killed scores of worshipers at a mosque.

Conflict in Iraq, the second-biggest OPEC producer, has largely spared the south, home to about three-quarters of its crude output. The nation pumped 3 million barrels a day last month, data compiled by Bloomberg show.

Cushing stockpiles

Cushing inventories climbed 1.755 million barrels in the seven days ended Aug. 15 to 20.155 million, the Energy Information Administration’s weekly report showed Aug. 20.

The Chicago Mercantile Exchange, where the most WTI and Henry Hub natural gas benchmark contracts are traded, resumed before the start of the regular session in New York.

About 500,000 crude contracts and 300,000 gas futures change hands on the bourse every day. North Sea Brent, the bellwether grade for more than half the world’s oil, is mainly transacted on ICE Futures Europe.

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