Oil tanker is seen at sunset anchored off the Fos-Lavera oil hub near Marseille, France, October 5, 2017.
Oil extended gains as signs of declining USA stockpiles pointed to healthy demand while investors weighed disruptions to supply because of global geopolitical tensions. This is months after of range-bound trading during which OPEC-led supply cuts buoyed crude prices but rising US output capped markets.
Despite prices dipping after reports of Iraqi forces taking control of previously Kurdish-held oil fields, Brent crude futures were still at $57.70 at 0646 GMT, 2.7 percent higher than last Friday's settlement and nearly a third above mid-year levels.
Jeff Brown, president of consultancy Facts Global Energy (FGE), said at the Reuters Global Commodities Summit last week that one potential upside for oil prices would be the USA imposing fresh sanctions on Iran. U.S. West Texas Intermediate crude futures dropped 0.64% to $50.97 a barrel.
Oil prices rose after Iraqi forces entered Kirkuk, briefly cutting some crude output from OPEC's second-biggest producer.
The common explanation given today by most analysts for the rise in Crude Oil is the military clash between Kurdish and Iraqi army forces near Kirkuk, an important oil producing region in northern Iraq.
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With ongoing supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) further tightening the market, analysts were revising upward their crude price forecasts for the rest of the year and into 2018.
Crude oil inventories matter for traders watching the supply-side pressures that pushed oil prices below $30 per barrel a year ago fade away. President Donald Trump last week refused to certify Iran's compliance with a 2015 worldwide agreement to curb the Islamic Republic's nuclear program in exchange for economic sanctions relief.
In an otherwise typically quiet Monday market, the price of Crude Oil is up nearly 1.7% since this week's open, as at the time of writing.
The American Petroleum Institute (API), an industry trade group, will release USA weekly petroleum inventory data at 4:30 p.m. EDT (2030 GMT), ahead of the government's report on Wednesday.
Australian shares .axjo extended their winning streak to a fourth straight session to rise 0.6 percent, while Japan's Nikkei .n225 rallied for a sixth day to the highest since November 1996.
More than one month ahead of OPEC's next official meeting, sources told Reuters its members were leaning toward extending an oil supply cut deal struck with Russian Federation and other producers for a further nine months. "These issues remind us oil and geopolitics are very much interlinked and it will remain so".