NEW YORK (Reuters) - Oil prices steadied on Monday after Brent touched above $70 a barrel on rhetoric from the United States, Iran and Iraq that fanned tensions in the Middle East after a U.S. air strike killed a top Iranian military commander.

FILE PHOTO: Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. REUTERS/Nick Oxford/File Photo

Prices pared gains during the session on growing doubts that Iran would strike back in a way that would disrupt oil supplies.

Brent crude futures LCOc1 settled at $68.91 a barrel, up 31 cents, after soaring to a high of $70.74 a barrel from Friday's settlement.

U.S. West Texas Intermediate CLc1 crude was up 22 cents at $63.27 a barrel after hitting $64.72, its highest since April.

“There seems to be an emerging dialogue along the lines that it’s not in the Iranians’ interest to lash out and attack oil infrastructure,” said Bob Yawger, director of futures at Mizuho in New York. “Because any attack on the oil infrastructure would most likely rally the barrel and that would, in turn, most likely shut down Iranian exports.”

Oil jumped more than 3% on Friday after a U.S. air strike in Iraq killed Iranian military commander Qassem Soleimani, heightening concerns about an escalation in conflict in the Middle East and the possible impact on oil supplies.

The region accounts for nearly half of the world’s oil production, with a fifth of global oil shipments passing through the Strait of Hormuz.

U.S. President Donald Trump on Sunday threatened to impose sanctions on Iraq, the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), if U.S. troops were forced to withdraw from the country.

Iraq’s parliament earlier called, in a nonbinding resolution, on U.S. and other foreign troops to leave Iraq.

Trump also said that the United States would retaliate against Iran if Tehran were to strike back after the killing.

“I don’t think we’re out of the woods when it comes to whether this problem could effect oil in a way that would be tangible to oil traders,” said Amy Jaffe, director of a program on energy security and climate change at the Council on Foreign Relations.

In post-settlement trade, oil turned negative after the U.S. Commodity Futures Trading Commission (CFTC) released data that showed money managers raised their net long U.S. crude futures and options positions.

OPEC oil output fell in December as Nigeria and Iraq adhered more closely to pledged reductions and top exporter Saudi Arabia made further cuts ahead of a new production-limiting accord, a Reuters survey found.