* Threat of Iraq supply disruptions receding -analyst
* U.S. exports of lightly refined oil permitted -Commerce
* U.S. crude inventories may have fallen by 4 mln barrels
By Keith Wallis
SINGAPORE June 25 Brent crude inched lower on
Wednesday, but held close to a nine-month high above $114 a
barrel as Sunni insurgents battled government forces for control
of Iraq's biggest refinery.
The 300,000 barrel per day Baiji complex, 200 km (120 miles)
north of Baghdad, has been fought over since last Wednesday with
sudden reversals on both sides.
But a lack of fresh threats to output from OPEC's second
largest oil producer curbed prices.
"Markets have already factored in the Iraq situation -
unless something more chaotic happens. The threat of supply
disruptions is receding," said Avtar Sandu, senior commodities
manager at Singapore's Phillip Futures.
Brent crude for August delivery had fallen 17 cents
to $114.29 by 0407 GMT, after gaining 34 cents to close at
$114.46 the session before.
U.S. crude climbed 67 cents to $106.70. It hit
$107.50 in early Asian trade after federal officials approved
exports of condensate, an ultra-light oil, in a marginal
relaxation of a 40-year ban on U.S. oil exports.
U.S. crude closed down 14 cents at $106.03 in the previous
Officials have told energy companies they can export a
variety of condensate if it has been minimally refined, a U.S.
Commerce Department spokesman confirmed to Reuters, although he
said there had been "no change in policy" towards crude oil
The Wall Street Journal reported that the Department of
Commerce, which has come under growing pressure to ease
restrictions amid a resurgence in domestic production, had given
approval via a private ruling to Pioneer Natural Resources Co
and Enterprise Product Partners LP to export the
Expectations of a fall in U.S. crude oil inventories last
week also buoyed the price of West Texas Intermediate, said
Michael McCarthy, chief market strategist at Sydney's CMC
Analysts are expecting a fall in U.S. commercial crude oil
inventories as refineries boosted output when the U.S.
Department of Energy's Energy Information Administration (EIA)
releases its inventory data for the week ending June 20 later on
Crude oil stocks are forecast to have decreased 1.6 million
barrels on average, according to Reuters poll of analysts on
But the fall in inventories could be larger than expected
due to more refining output, McCarthy said and forecast the
drawdown could be as high as 3-4 million barrels.
Meanwhile, OPEC Secretary General Abdullah al-Badri said on
Tuesday that there was no shortage of oil in the market and that
the current Brent price is due to market nervousness over Iraq.
OECD commercial stocks stood at 57.5 days of forward demand, he
Investors are also eyeing the situation in Ukraine after
Russia renounced a mandate to send troops into the country and
Russian President Vladimir Putin said "a substantive discussion"
must follow a seven-day ceasefire to resolve the crisis.
(Reporting by Keith Wallis; Editing by Joseph Radford)