Brent oil falls to 14-month low as Iraqi Kurds retake Mosul dam
LONDON (Bloomberg) -- Brent crude slumped to the lowest in almost 14 months after Kurdish and Iraqi forces seized control of Iraq’s largest dam from Islamic State militants. West Texas Intermediate also declined.
Brent slid as much as 2.2%. Kurdish forces and government anti-terrorism units took over the Mosul Dam after receiving air support from the U.S., reversing gains made by the Sunni-Muslim insurgents in the north, according to Iraqi military spokesman Qassim Ata. Prices also fell as Libya’s oil production increased.
“The anti-ISIS forces are gathering strength and making progress,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The threat has peaked, and the risk premium is declining. People are pulling out of the market.”
Brent for October settlement slid $2.19, or 2.1%, to $101.34 a barrel. It fell as far as $101.29, the lowest since June 26, 2013. The contract rose $1.46 on Aug. 15, the most since July 17. The volume of all futures traded was about 12% below the 100-day average for the time of day.
WTI for September delivery decreased $1.39, or 1.4%, to $95.96 a barrel on the New York Mercantile Exchange. Volume was 3.5 percent below the 100-day average. The October contract of the U.S. benchmark crude was at a discount of $7.93 to Brent for the same month on ICE. The spread closed at $8.21 on Aug. 15, the widest since June 24.
The conflict in Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries (OPEC), has spared the south, home to about three-quarters of its production. The nation pumped 3 million barrels a day in July, according to data compiled by Bloomberg.
In Libya, also an OPEC member, production increased to 540,000 bopd as the port of Es Sider prepared to ship crude, according to Mohamed Elharari, a spokesman for National Oil Corp.
Output has expanded from 415,000 bopd on Aug. 14. Es Sider was one of two export terminals handed over last month by rebels seeking self-rule in the eastern regions.