Brent extends drop as Middle East oil supply stays safe

Iraq oil news

Brent fell for a second day amid speculation that turmoil across the Middle East will not threaten crude supplies.

Futures dropped as much as 0.6% in London. Libya’s production increased even as Islamist militias seized Tripoli’s international airport, while supply from Iraq remained uninterrupted by its struggle to form a new government. CME Group, the world’s largest futures market, halted most of its Globex platform for about four hours, suspending contracts including oil and commodities.

“The region is in chaos but production continues to rise,” said Robin Mills, the head of consulting at Manaar Energy Consulting and Project Management.

“Brent’s been pretty weak. Global demand is still sluggish.”

Brent for October settlement declined as much as 64 cents to $101.65 a barrel on the London-based ICE Futures Europe exchange and was at $102.19 at 2:40 p.m. Singapore time.

The contract decreased 34 cents to $102.29 on August 22. The volume of all contracts traded was about 53% below the 100-day average. Prices are down 7.8% this year.

In Libya, production climbed to 656,000 barrels a day from 612,000 barrels on August 21, said Mohamed Elharari, a spokesman at state-run National Oil Corporation.

An alliance known as Fajr Libya, or Libya Dawn, said it wrested control of the Tripoli airport from another group amid weeks of fighting that threatened to worsen security in the nation, a member of the Organization of Petroleum Exporting Countries.

In Iraq, US President Barack Obama’s bid to have Arabs take the lead in combating Islamic State suffered a setback as Sunni lawmakers quit talks on forming a new government, after Shiite gunmen killed scores of worshipers at a mosque.

Conflict in Iraq, the second-biggest OPEC producer, has largely spared the south, home to about three-quarters of its crude output.

The nation pumped 3million barrels a day last month, data compiled by Bloomberg show.