* Sunni militants renew attack on refinery near Baghdad
* Oil majors pull foreign staff from Iraq
* U.S. domestic crude stocks decline to 386.5 mln barrels
* Fed shaves $10 billion from monthly bond purchases
(New throughout, updates prices and market activity to
settlement, adds Brent-WTI spread)
By Lorenzo Ligato
NEW YORK, June 18 Brent crude rose to a
nine-month high on Wednesday as investors worried about exports
from Iraq, while U.S. crude dipped after government numbers
showed domestic crude inventories fell much less than an
industry group had reported.
Brent rose past $114 a barrel as Sunni militants opposing
Baghdad's Shi'ite government battled their way into Iraq's
largest refinery, raising the specter of supply disruptions from
OPEC's second-largest producer.
U.S. crude fell below $106 for the first time in a week,
after the Energy Information Administration (EIA) reported crude
stocks declined 579,000 barrels to 386.5 million barrels in the
week ending June 13. The drawdown was much less
than the drawdown of 5.7 million barrels reported by the
American Petroleum Institute, an industry group, on Tuesday.
"The number of crude oil stockpiles was shocking: the EIA
report and the API report are kind of a tale of two cities. The
market was gearing up for a more supportive report," said Phil
Flynn, an analyst at Price Futures Group in Chicago. "The market
will now get back to focus on the situation in Iraq, and that's
going to keep it well supported."
EIA also reported that crude stocks at the Cushing,
Oklahoma, delivery hub rose by 247,000 barrels.
Brent rose 81 cents to settle at $114.26 a barrel,
the highest level since Sept. 6. U.S. crude fell 39 cents
to settle at $105.97 a barrel, the lowest since June 11.
The spread CL-LCO1=R between the two benchmarks widened to
close at $8.67, compared to a spread of $7.58 the previous
Last week, both crude benchmarks rose more than 4 percent on
worries about disruptions to Iraq's oil supply. The crisis
deepened on Wednesday as Sunni militants renewed their attack on
the refinery of Baiji north of Baghdad, the biggest source of
fuel for domestic consumption in Iraq.
Iraqi officials have said that the major oilfields in the
southern regions are safe. Still, oil companies have pulled
foreign staff out of Iraq, fearing violence could spread south
"Crude prices are reacting to the headlines on the attack on
the Baiji refinery," said Olivier Jakob, analyst at
Switzerland-based consultancy Petromatrix.
Concerns about Iraqi supply have been mitigated by the
possibility that the Kurdish Regional Government region could
"In the short term, that could boost oil output and exports
from KRG, potentially doubling from 120,000 bpd (barrels per
day) to 250,000 bpd in July," said Natixis oil markets analyst
U.S. oil fell further and Brent pared gains after the
Federal Reserve closed its policy meeting with a widely
anticipated move, shaving another $10 billion from its monthly
bond purchases, which have supported commodity prices.
(Additional reporting by Ron Bousso in London and Jacob
Pedersen in Singapore; Editing by David Evans, Jessica
Resnick-Ault, David Gregorio and Andrew Hay)