The price of oil was steady Tuesday as investors monitored the insurgency roiling Iraq for any signs it could affect its oil production and exports.

Islamic militants have been steadily expanding their grip on the country's north, where they control a broad swath of territory. But the bulk of the country's production and export operations are in the south, which have so far been spared in this month's advance by the al-Qaeda-inspired group. Iraq's daily oil production hit 3.5 million barrels this year, up from nearly 2.4 million a day in 2009.

Benchmark U.S. crude for August delivery dropped $0.02 to $106.15 per barrel on the New York Mercantile Exchange. The contract dropped $0.66 on Monday. Brent crude, used to price international oils, fell $0.02 to $113.70 a barrel in London.

The head of OPEC, the group of major oil exporters, on Tuesday said the recent rise in crude oil prices can be blamed on market fears and speculation, rather than any drop in output from Iraq.

Secretary General Abdullah Al-Badry said Iraq is "still producing as normal," with 95% of its capacity in the country's south being unaffected by the violence.  Click here to read today's joint conclusion of the EU-OPEC energy dialogue.

In other energy futures trading on the Nymex:

  • Wholesale gasoline rose 0.89 cents to $3.12 a gallon.
  • Natural gas rose 3.4 cents to $4.48 per 1,000 cubic feet.
  • Heating oil rose 0.7 cents to $3.039 a gallon.

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