Brent crude fell the most in more than two months, reversing a rally that started when Islamist militants seized the northern Iraqi city of Mosul almost a month ago. West Texas Intermediate also declined. The Islamic State, a splinter group of al-Qaeda, has taken control of provinces in northwestern Iraq after seizing Mosul on June 10. The insurgency hasn’t spread to Iraq’s south, the source of more than three-quarters of its oil output. Brent’s premium over WTI narrowed to a one-month low on expectations U.S. crude inventories decreased last week. “We still haven’t had supply disruption in Iraq,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford , Connecticut . “The market has erased the Iraqi part of the rally, but geopolitical risk is still a concern. WTI is a little bit more supported because of the expectation that we will see another drop in […]