Crude oil futures slip as Iraq risks recede

The price of oil slipped as the risk of supply disruptions in Iraq faded and key export terminals in Libya were expected to reopen.

Oil prices in recent weeks have largely been driven by concerns that violence in Iraq, OPEC’s second-largest producer, would disrupt supplies pushing crude oil prices to a 10-month by end of June 2014.

The al-Qaida-inspired Islamic State of Iraq and the Levant rampaged across Iraq in recent weeks, feeding off the chaos of neighboring Syria’s civil war to seize control of a large chunk of territory in Iraq and effectively erasing the border between the two countries.

Despite the chaos, Iraqi oil production continued and prices began to stabilize when the militants’ advance appeared to have slowed after encountering stiff resistance in Shiite-majority regions of Iraq.

An agreement in Libya between the central government and a regional militia was expected to lead to the reopening of two eastern oil terminals that would boost the country’s crude exports by about 500,000 barrels a day.

Benchmark US crude for August delivery fell 42 cents to $104.06 a barrel on the New York Mercantile Exchange, its sixth day of declines. Brent crude, a benchmark for international oils, fell 24 cents to $111 a barrel.