Oil prices fluctuated Monday as investors tried to gauge the potential for supply disruptions resulting from tensions in the oil-rich Kurdish region of Iraq.
U.S. crude futures settled up 6 cents, or 0.12% to $51.90 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 38 cents, or 0.66%, to $57.37 a barrel on ICE Futures Europe.
A drop in the number of rigs drilling for the U.S. last week helped lift the U.S. benchmark -- a sign that supplies in the U.S. will be tightening, analysts said -- U. S. crude prices have risen in nine of the past 11 trading sessions. The gap between the two price benchmarks has been relatively wide, helping to spur a surge in exports of crude from the U.S., and some expect the difference to narrow in the coming weeks.
"On the WTI side, things are starting tighten up," said Ric Navy, senior vice president for energy futures at RJ O'Brien & Associates LLC.
Still, oil prices have been trading within a narrow range recently.
Donald Morton, senior vice president at Herbert J. Sims & Co. who oversees an energy trading desk, said there is uncertainty about how much Kurdish oil production has been disrupted
"There's anxiety over what is really being pumped," he said. Still, he said oil prices are "way up at the high end of the trading range" where they have stagnated.
Since a nonbinding Kurdish vote for independence, Iraq's central government and the region's neighbors in Iran and Turkey have moved aggressively, shutting down borders and flights.
Iraqi forces retook the oil-rich Kirkuk area, throwing into question Kurdistan's ability to export oil through Turkey and raising doubts about investments from big oil companies such as Chevron Corp.
Iraq, a member of the Organization of the Petroleum Exporting Countries, also reported that oil exports in the south were increased by 200,000 barrels a day to make up for the shortfall from Kirkuk.
"There is spare capacity in the U.S. and in OPEC nations that makes it difficult for Brent to go above $60, so it is stuck in a relatively small range," said Olivier Jakob, managing director at oil consultancy Petromatrix. "Over the weekend, Iraq announced that it would increase output from the south to offset losses from the north. That's an illustration of what the market can do when it has spare capacity."
Still, some analysts point to data showing that U.S. shale oil producers are poised to bring more crude online, which will weigh on oil prices.
"The oil market still remains deaf in one ear and is responding primarily to price-supportive news," said Commerzbank in a recent note. "The prices of both oil types, and especially of Brent, are overheated and [we] expect them to correct in the short term."
Since OPEC and 10 other non-OPEC countries struck an agreement to cut global production by 1.8 million a barrels a day last year, U.S. producers drilled a total of 7,270 uncompleted wells to September.
Gasoline futures rose 0.02 cent, or 0.01%, to $1.6783 a gallon. Diesel futures fell 1.74 cents, or 0.96% to $1.7878 a gallon.
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(END) Dow Jones Newswires
October 23, 2017 16:08 ET (20:08 GMT)