Oil Prices Pause for Breath

Oil futures showed little movement Monday, after several weeks of contradictory factors left the market uncertain over where the next driver would come from.

Brent crude for September delivery fell 0.1% to $107.15 a barrel on ICE Futures Europe, while on the New York Mercantile Exchange WTI crude for August delivery was up 0.1% at $103.18 a barrel.

There is still no significant effect on oil supplies from Iraq as a result of fighting in the northern parts of the country. Libya said the first oil will be exported from the giant Sharara field, but also that output there has fallen.

Tensions between Russia and Ukraine, which leapt back into headlines last week when passenger plane MH17 was shot down, still aren't a clear driver in oil-price terms. Sucden Research analysts noted that oil prices leapt up after the disaster, but relaxed again the next day.

"The weekend saw Western leaders hint at further sanctions against Russia as mounting evidence pointed the finger at pro-Russia rebels for the downing of the Malaysia Airlines passenger jet," Sucden wrote.

Bank of America Merrill Lynch revised up its forecasts for Brent prices this year and next. The driver: "geopolitical concerns and supply disruptions," which have exceeded expectations. Depreciation of the trade-weighted dollar and slightly higher-than-predicted U.S. inflation are also factors, they said.

Brent is likely to average $109 a barrel in 2014, the bank said, up from a previous forecast of $106. In 2015, the forecast is up to $108 a barrel from $103. For U.S. crude, the bank sees a fall below $100 a barrel in the second half of 2014, with high supplies and refineries demanding less as they go into maintenance season.

Recently the ICE's gas oil contract for August delivery was down $3.50 at $880.50 a metric ton, while Nymex gasoline for August delivery was up 109 points at $2.8458 a gallon.