July 8, 2014 / 6:50 AM / 3 years ago

UPDATE 8-Brent oil sinks for 7th straight day to a one-month low

3 Min Read

* Brent set for longest losing streak since Oct 2012

* Coming up: weekly U.S. API inventory data at 2030 GMT (Updates prices to settlement, adds latest inventory forecasts)

By Anna Louie Sussman

NEW YORK, July 8 (Reuters) - Brent crude slid more than $1 a barrel on Tuesday, its seventh straight decline, hitting a one-month low below $109 as Libyan oil exports looked likely to rise and fears eased of supply disruption in Iraq.

Brent has shed more than 5 percent since last month, when the Iraq crisis drove prices to a nine-month high of $115.71.

Libya's 340,000 barrel per day (bpd) El Sharara oilfield has resumed operations after a four-month strike, a spokesman for state-run National Oil Corp (NOC) said. This may free more oil for export after last week's port deal with rebels.

"The Libyan situation seems real this time around, and the market is at least giving it the benefit of the doubt that we will see more oil," said John Kilduff, a partner at Again Capital LLC in New York.

Brent crude for August delivery fell by $1.30 to $108.94 a barrel, after touching a session low of $108.69.

The U.S. benchmark crude slipped 13 cents to $103.40 in an eighth straight day of declines.

Brent's premium over U.S. crude CL-LCO1=R narrowed by more than $1 to $5.54, going below $6 for the first time since mid-June.

Fears about oil exports from Iraq also eased, said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland.

"The oil fields in the south are not in direct danger, and the oil fields in the north and Kurdistan are also not in danger," Jakob said.

Iraq's new parliament has brought forward the date of its next session to July 13.

The Brent future contracts for delivery in September moved to a small premium over contracts for delivery next month, a condition known as "contango," which traders said was an indication of weak demand.

Libyan Exports

In Libya, preparations were under way to reopen two major oil ports in the east. Shut by protests almost a year ago, the Ras Lanuf and Es Sider ports make up more than a third of the OPEC producer's export capacity.

BNP Paribas analysts noted that questions remained about how much maintenance would be needed at oilfields and pipelines.

On Monday, a NOC spokesman said Libya's oil output was at 326,000 barrels per day, well below its post-civil war high near 1.4 million bpd.

Weekly oil inventory data from the United States is due on Tuesday and Wednesday. U.S. commercial crude and gasoline inventories were forecast to have dropped in the week to July 4, a preliminary Reuters survey of five analysts showed. Distillate stockpiles were expected to have risen.

West African crude differentials were at two-year lows with 40 out of 65 cargoes of Nigerian oil still available for purchase in the current program. (Additional reporting by David Sheppard and Rowena Caine in London and Florence Tan in Singapore; Editing by Marguerita Choy and David Gregorio)

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