Brent crude oil was steady just below $114 as worries about a supply interruption in Iraq faded. The commodity traded at $113.78 at 8:50 GMT as investors evaluated whether or not the Middle Eastern nation's ongoing conflict would escalate further and tighten global supplies.
Sunni insurgents continued their push towards Baghdad on Thursday with fighting centered around Baiji, Iraq's largest oil refinery. The complex, capable of producing 300,000 barrels per day, is in danger of falling into the hands of rebels from the Islamic State of Iraq and the Levant (ISIS), but markets have remained relatively calm as most of the OPEC supplier's exports come from the south.
For the moment, Iraq's southern oilfields are unaffected by the conflict. That stability has kept Brent prices from rising any higher.
Related Link: Brent Prices Steady At 4 As Tension In Iraq Eyed
U.S. crude gained 47 cents on Wednesday after the U.S. government lifted a nearly 40 year old ban on exporting an extra-light oil known as condensate by approving requests for two companies to begin shipping to foreign buyers. CNBC reported that Enterprise Products Partners, one of the companies approved to export condensate, made a statement saying exports could begin at any time.
However, WTI retreated modestly after US crude inventory data from the Energy Information Administration showed an unexpected rise on Wednesday. The figures indicated that U.S. crude stocks increased by 1.74 million barrels last week, suggesting weaker demand in the world's number one oil consuming nation.
Also in focus will be the conflict between Ukraine and Russia as Ukraine's newly elected leader Petro Poroshenko heads to Brussels to sign a trade agreement with the EU that Moscow has been long opposed to. The trade agreement comes in the midst of a seven day ceasefire between pro-Russian separatists and Ukrainian government forces.
The West has been putting the pressure on Russia to do more to help resolve the crisis before the ceasefire expires and many expect to see new sanctions on Russia if the Kremlin doesn't back Poroshenko's peace plan.
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- Islamic State of Iraq