Both contracts had soared late last week to nine-month peaks, buoyed by supply concerns as Iraq was rocked by a violent militant insurgency. However, the oil market has since pulled lower as those Iraq supply risks failed to materialise, according to analysts. Militants have captured swathes of Iraq's north but have yet to directly threaten the key oil-producing region in the south, the main source of exports.
The militants are yet to threaten the key oil-producing region in the south
Added to the picture, prices have also been dented by recovering crude supplies from Libya, and by profit-taking. "As yet, no actual disruption to supply has occurred as the majority of Iraq's oil infrastructure remains far removed from the escalating violence," said analyst Dorian Lucas at energy consultancy Inenco. "With no actual disruption to supply, Brent crude plateaued around $115 ... and has now started to relinquish some of its recent gains.
"This could be attributed to the unrealised fears for supply, but is also likely to have been weighed upon by the recent increase in Libyan crude oil output," he added. Last Thursday, Brent oil had soared to USD 115.71 a barrel, while WTI crude hit USD 107.73 on Friday. Both were levels last seen in September 2013.