Updated from 2:20 p.m. EDT
Crude oil prices jumped, closing at a one-month high Tuesday as traders reacted to the latest disruption of Iraqi exports following the long U.S. holiday weekend.
The benchmark U.S. crude gained $1.26, or 3.3%, to $39.65, continuing a rally that began last Wednesday after prices had touched a three-month low.
Iraqi exports have been cut in half since the weekend, when a major pipeline in the southern part of the country was damaged. It's unclear what caused the damage or when normal operations will be restored.
Iraqi production only returned to normal less than two weeks ago, following lengthy repairs required because of sabotage acts.
Iraq's production has ranged between 1.6 million and 1.8 million barrels a day recently.
Oil prices had fallen as much as 15% from their record high of more than $42, touched right before the Organization of Petroleum Exporting Countries meeting a month ago. Prices briefly fell through $36 last week until short-term supply concerns re-emerged.
Members of the cartel agreed to raise the group's production quota by 2 million barrels a day in July and another half-million barrels a day in August, should that prove necessary. The current ceiling is 25.5 million barrels a day. Market analysts say the move is largely symbolic because the cartel's members were already producing some 2 million barrels a day above their previous quotas.
Traders bid up prices on short-term supply concerns triggered by strong global demand and terrorist attacks on oil-industry personnel and facilities in the Persian Gulf region ahead of the peak summer driving season in the U.S. and Europe.