Oil prices settled higher on Monday as increased tensions in the Middle East raised concerns over global crude supplies, according to Bloomberg MarketWatch.
November West Texas Intermediate crude climbed by 42 cents, or 0.8%, to settle at $51.87 a barrel on the New York Mercantile Exchange.
December Brent crude, the global benchmark, gained 65 cents, or 1.1%, to end trading at $57.82 a barrel.
The risks in the Middle East intensified on Monday after Iraqi forces entered Kirkuk, a major oil-producing area held by Kurdish fighters. The Iraqi army has taken full control of the city and secured North Oil Company facilities, according to the Financial Times.
Tensions between the Kurdish Regional Government and Baghdad have been building after the Kurds voted for independence in a September referendum, sparking concerns over Iraq’s oil exports. Iraq is the second-largest oil producer in OPEC.
“In recent months, we have stressed on a number of occasions that the tensions and potential effects on the production and transport infrastructure in the region pose the biggest risk to our fairly conservative price forecasts. We otherwise see the oil market as still amply supplied, which would rather justify a Brent price of $50 per barrel,” said analysts at Commerzbank.
In other news, a monthly report from the Energy Information Administration revealed expectations for a rise of 81,000 barrels a day in November in shale crude oil production from seven major domestic oil plays. The report has forecast increases in shale oil output every month so far this year.
Meanwhile, November natural gas slid 1.8% to $2.946 per million British thermal units on the New York Mercantile Exchange.