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Friday, Jun 20, 2014

Business

Oil mixed in Asia amid Iraq supply fears

AFP | Friday, Jun 20, 2014

Iraqi demonstrators, some victims of violent attacks, and other family members who lost loved ones, gather in Baghdad's Firdos Square, on April 8, 2014, asking for the government to recognize their rights and to compensate for their loss. The latest violence in Iraq is part of a protracted surge in nationwide bloodshed that has left more than 2,400 people dead since the start of the year and sparked fears Iraq is slipping back into the all-out sectarian conflict that plagued it in 2006-07.

SINGAPORE - Oil prices were mixed in Asia on Friday but retained support near a nine-month peak as dealers track the unfolding sectarian conflict in Iraq fearing it could cause a major supply disruption.

Brent crude for August eased 15 cents to US$114.91 (S$144) in mid-morning trade, after rallying to US$115.06 in London, its highest since early September.

US benchmark West Texas Intermediate for July delivery rose 26 cents to US$106.69.

"Oil saw support from the risk of conflict in Iraq disrupting oil supplies, as the US said it would send military advisers to the country," Singapore's United Overseas Bank said in a note.

US President Barack Obama on Thursday announced that he was ready to send 300 advisers to Iraq and if necessary to take "targeted" and "precise" military action to counter radical Sunni fighters.

"We will help Iraqis as they take the fight to terrorists who threaten the Iraqi people, the region and American interests as well," he said.

Washington has already positioned an aircraft carrier in the Gulf and is also considering using drone strikes against the militants.

A Congressional source has said US Secretary of State John Kerry will travel to Iraq "soon".

The militants have captured swathes of the country's north but have yet to directly threaten the key oil-producing region in the south.

The crisis has rocked the global oil market because Iraq is the second-biggest producer within the 12-nation Organisation of Petroleum Exporting Countries (OPEC).

The country has more than 11 per cent of the world's proven resources and produces 3.4 million barrels a day.

Aside from concerns about Iraq, French bank Credit Agricole said "the market today should be relatively quiet heading into the weekend" with no significant data release and the conclusion of a key US central bank meeting.

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