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Oil prices mixed as market eyes Iraq, US supplies

Oil prices finished mixed on Monday (Aug 11) as traders kept watch on turmoil in Iraq, while anticipating another drop in US crude-oil inventories.

NEW YORK: Oil prices finished mixed on Monday (Aug 11) as traders kept watch on turmoil in Iraq, while anticipating another drop in US crude-oil inventories.

US benchmark West Texas Intermediate (WTI) for September delivery advanced 43 cents to US$98.08 a barrel on the New York Mercantile Exchange. European benchmark Brent oil for September delivery fell 34 cents to US$104.68 a barrel in London.

Iraq remained in focus as President Fuad Masum accepted the nomination of Haidar al-Abadi to serve as the next prime minister in an effort to replace the much-criticised Nuri al-Maliki.

The shakeup came after Iraq's Kurdish forces on Sunday reclaimed two towns from Islamic State fighters, buoyed by US air strikes that began last week, aimed at stemming the jihadist advance .

Andy Lipow, head of Houston consultancy Lipow Oil Associates, said the US air strikes have raised hopes the Kurds "will be able to turn around and push back" the jihadists.

Brent, which is more closely tied than WTI to international developments, suffered as there were no significant oil outages in Iraq, analysts said.

"Evidently, the majority of market participants still do not expect any supply outages in Iraq," said a note by Commerzbank. "We see no justification for the complacent attitude of players on the oil market given the geopolitical tensions and anticipate a rising oil price."

Lipow attributed the strength in WTI to anticipation that this week's government inventory report will again show high refinery utilisation as plants continue to keep gasoline output high to slake lofty summer-driving demand.

US commercial crude inventories have fallen more than 22 million barrels over the last six weeks, according to the US Energy Information Administration.