Brent crude rose by the most in three sessions after a car bomb exploded in the Kurdish region ofIraq, OPEC’s second-largest producer. West Texas Intermediate also gained in New York.
Futures climbed as much as 1.3 percent in London. At least five people were killed when a car bomb exploded outside the governor’s office in Erbil, capital of the Kurdish region, according to Iraqi media. The attack may be the start of a more sustained campaign of retaliation by Islamic State against Kurdish fighters, said Nihat Ali Ozcan, an analyst at the Ankara-based Economic Policy Research Foundation.
“The Iraq bomb looks to have pushed prices up as there isn’t much out there supporting the bullish scenario otherwise,” Abhishek Deshpande, oil markets analyst at Natixis, said by e-mail. “It will be short-lived as markets are still flooded with oil.”
While Kurdish forces have been at the forefront of the fight against Islamic State militants, Erbil has been spared the worst of the violence that has gripped the country. The Kurdish region pumped 420,000 barrels a day of crude last month, according to estimates from the International Energy Agency.
Brent for January settlement rose as much as 98 cents to $79.45 a barrel on the London-based ICE Futures Europe exchange and was at $79.29 at 1:28 p.m. local time. Trading volume was 3 percent below the 100-day average for the time of day. Prices have decreased 28 percent this year.
WTI for December delivery, which expires tomorrow, increased 27 cents to $74.88 a barrel in electronic trading on the New York Mercantile Exchange. The European benchmark crude traded at a premium of $4.32 to WTI on ICE.
Today’s attack was carried out by a suicide bomber, Erbil-based Rudaw news agency reported, citing Tahir Abdullah, a local official. Several people were also wounded, the state-sponsored Iraqiya television reported.
Members of the Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, meet in Vienna Nov. 27 to discuss whether to change their output target. Last month OPEC pumped 30.97 million barrels a day, exceeding its collective output target of 30 million barrels a day for a fifth straight month, data compiled by Bloomberg show.
The group may act to cut supply and will probably reduce output next year regardless of the outcome of next week’s meeting, according to Morgan Stanley.
“We were pessimistic about material action in November, but now see signs that some action is possible, or even likely, at the November meeting,” Adam Longson, a New York-based analyst, said in a report.
In the U.S., crude inventories expanded by 3.7 million barrels in the week ended Nov. 14, the industry-funded American Petroleum Institute reported yesterday, according to Bain Energy. Data from the Energy Information Administration today may show stockpiles shrank by 1.5 million barrels, according to the median estimate in a Bloomberg News survey of 11 analysts.
A bill to approve TransCanada Corp.’s $8 billion Keystone XL pipeline was rejected by the Senate after years of political fighting over jobs, climate change and energy security. The project, proposed in 2008, would have the capacity to carry 830,000 barrels a day of crude and connect Alberta’s oil sands to the U.S. Gulf Coast via Montana, South Dakota and Nebraska.