Brent crude rises as US approves air strikes on Iraq
By Jacob Gronholt-Pedersen
Air strikes would significantly raise the threat of oil output disruptions in the second-largest OPEC producer.
"Speculators may use this as an opportunity to enter the market, after the big correction we saw over recent weeks. But it seems the market is still oversupplied, and that should keep a cap on prices," said Emori.
Brent crude for September delivery rose $1.18 to $106.62 a barrel by 0646 GMT, after trading as high as $106.85 a barrel earlier in the session. The contract was on track for gains of more than 1 percent for the week.
U.S. crude rose 87 cents to $98.21 a barrel, after trading as high as $98.45 a barrel.
Brent's premium to U.S. crude hit $8.57 a barrel on Friday, the highest in more than six weeks.
"The market is very thin, so such sudden news can result in significant price moves, not only in oil but also in stock and currency markets," said Hasegawa.
But prices fell back more than $10 over the past six weeks as it became clear that Iraqi oil continued to flow steadily from southern fields, and as investors shifted attention to what appeared to be an oversupplied global oil market.
CHINESE EXPORTS JUMP
However, the country's crude oil imports fell 9 percent in July from a year ago to 23.76 million tonnes, hitting the lowest daily level since March, the data showed.