Middle East tension spikes Brent

Brent crude rose above $61 a barrel supported by geopolitical tensions in Libya and Iraq, while traders eyed the outcome of Iran nuclear talks for further trading cues.

Iran’s foreign minister suggested that a 10-year moratorium on some aspects of the country’s nuclear programme might be acceptable to Tehran, though he declined to discuss the issue in detail.

Any sign of a lasting agreement between Tehran and six world powers could result in a flood of Iranian crude returning to the market.

US Secretary of State John Kerry said a nuclear deal with Tehran would address security concerns of Gulf Arab countries, although Washington was not seeking a “grand bargain” with Iran, a reference to wider political and security cooperation.

Fighting has escalated in northeast Iraq where the Islamic State militants have lit up oil wells to deter Shi’ite militiamen and Iraqi soldiers from advancing. In Libya, worsening security conditions have led to the closure of 11 oilfields.

Brent rose 53 cents at $61.01 a barrel in early trade, but was on track for a weekly drop after an 18 percent gain last month. US West Texas Intermediate crude was up 34 cents at $51.10 a barrel, set for a more than 2 percent weekly rise.

Concerns over Middle East oil supply widened Brent’s premium to WTI by nearly a dollar to close to $10.