US crude oil jumped above $107 a barrel on Friday, reaching a new nine-month high on the back of profit-taking from the July futures contract expiration and expectations of higher refinery runs this summer.
Rising US oil prices further constricted their discount to Brent crude, which fell from a nine-month high, slipping below $115 a barrel, on easing concerns over supply disruptions due to the violence in Iraq, Reuters reported.
The spread between the two benchmarks narrowed for the first time in 10 days, encouraging traders to take profits.
"Brent has been giving back some of its gains from the previous days, while WTI (West Texas Intermediate) has been rallying ahead of the expiration of the contract. So there could be some spread-play occurring," said Andrew Lipow, president of Lipow Oil Associates in Texas.
Brent crude slipped 25 cents to settle at $114.81 a barrel. It had reached $115.71 on Thursday, its highest intraday price since 9 September 2013.
US crude rose 83 cents to settle at $107.26 a barrel, the highest settlement since 18 September. It had reached an intraday high of $107.73 earlier in the session, as traders took profits and covered their short positions ahead of the contract expiration, Santiago Diaz, a broker at INTL FCStone in Miami, told Reuters.
The spread between the two benchmarks narrowed to close at $7.98 from a spread of $9.01 in the previous session. It had been widening since last week, as the conflict between Iraqi government-led forces and Sunni militants raised the spectre of supply disruptions in the global oil market.
Fighting concentrated around Iraq's largest refinery, a 300,000-barrel-per-day facility located in Baiji, 124 miles (200 km) north of Baghdad.
Government forces appeared to be holding out in the refinery on Friday, mitigating export disruption concerns. In addition, the major oilfields south of Baghdad, which export at least 2.5 million barrels of oil per day, remain unaffected.
Brent crude on Friday fell for the first time since Monday, though it is still up more than $2 from the beginning of the week - its second weekly gain in a row.
"We've been rallying for the entire week here and reached a new nine-month high. Now Brent is taking a pause for breath, as people assess what's the reality in Iraq," said Matt Smith, an analyst at Schneider Electric in Louisville, Kentucky.
US crude also was supported by the anticipated opening later this month of the Seaway Loop oil pipeline, which will run alongside the 400,000-bpd Seaway line and transport another 450,000 barrels per day from Cushing, Oklahoma to Houston.