LONDON - Oil prices rose Monday, but Brent crude held under last week's nine-month peak, as traders mulled the impact of Iraq violence on global supplies, analysts said. Brent crude for August delivery rose 34 cents to $112.80 per barrel nearing midday trade. The July contract had surged Friday to $114.69 -- last seen in September 2013. US benchmark West Texas Intermediate for July delivery added 15 cents to $107.06 a barrel. "Trading has seen levels consolidate ... as concerns of significant disruptions were at least for now over exaggerated," said analyst Kash Kamal at the Sucden brokerage in London. He noted that most of Iraq's oil infrastructure was in the south.
"Investors will be paying close attention to any further developments, but with the concentration of fighting limited to the north and west of the country, oilfields which account for the majority of output in the southern region remain intact," Kamal added.
"Subsequently any contagion of violence towards the south could see further risk premium added to ... Brent futures."
The militant offensive, spearheaded by the jihadist Islamic State of Iraq and the Levant, has taken a huge swathe of predominantly Sunni Arab territory in northern Iraq since late Monday, and was advancing on Baghdad amid grisly reports of atrocities.
The United States ordered an aircraft carrier into the Gulf on Saturday, although US President Barack Obama ruled out sending troops back into combat.
The crisis has a direct bearing on crude prices because Iraq is the second-biggest oil exporter in the 12-nation Organization of Petroleum Exporting Countries (OPEC) after kingpin Saudi Arabia.
"Markets remain on high alert on developments in Iraq... Investors are focused on Iraq and the potential for further (supply) disruptions," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP.
Among OPEC members, Iraq ranks behind Saudi but ahead of Iran and Kuwait, and also has proven crude reserves of 140.3 billion barrels, and 3.158 trillion cubic metres of natural gas, according to cartel figures.
Washington condemned Sunday a "horrifying" massacre by militants said to have killed 1,700 Iraqi Shia air force recruits in the northern city of Tikrit. Photographs purportedly showing the executions were posted by militants online.
A roadside bombing in central Baghdad also killed at least nine people and wounded 23 on Sunday, according to security and medical officials.