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WTI Trades Near Two-Week Low as Iraq Output Spared; Brent Steady

July 1 (Bloomberg) -- West Texas Intermediate crude traded near the lowest price in more than two weeks amid speculation that escalating violence in Iraq won’t disrupt supply from OPEC’s second-largest oil producer. Brent was steady in London.

Futures were little changed in New York after falling 0.4 percent yesterday. Iraqi political leaders will meet today without a clear choice for prime minister who can narrow sectarian and ethnic divisions. Militants who declared an Islamic caliphate from the eastern part of the country to northern Syria haven’t disrupted oil supplies from the south, home to more than three-quarters of Iraqi output.

“It now appears that the market risks associated with the Iraq conflict are fully priced in,” Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group in Melbourne, said in a note today. “It would take a significant step up in escalation to move prices higher from here.”

WTI for August delivery was at $105.49 a barrel in electronic trading on the New York Mercantile Exchange, up 12 cents, at 10:58 a.m. Sydney time. The contract dropped 37 cents to $105.37 yesterday, the lowest close since June 11. The volume of all futures traded was about 57 percent below the 100-day average. Prices rose 2.6 percent in June for a second monthly increase.

Brent for August settlement was 3 cents lower at $112.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.82 to WTI, compared with $6.99 yesterday.

President Barack Obama ordered another 200 combat-equipped military personnel to Iraq indefinitely for security at the U.S. embassy, its support facilities and Baghdad International Airport. In addition to troops, he’s sending “rotary-wing aircraft and intelligence, surveillance and reconnaissance support,” he said in a letter to House Speaker John Boehner.

U.S. crude stockpiles declined last week, according to a Bloomberg News survey before government data tomorrow.

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