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NYMEX crude prices ease in Asia with Iraq tension underpinning mkt

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Investing.com -

Investing.com - Crude oil prices eased in Asia on Tuesday in mild profit taking, but tension in Iraq as the government battles Islamic militants underpins the commodity.

On the New York Mercantile Exchange, West Texas Intermediate Crude Oil for delivery in August traded at $106.18 a barrel, down 0.11%, after hitting an overnight session low of $106.04 a barrel and a high of $106.78 a barrel.

Brent oil futures rose 0.4% to $112.94 a barrel on the ICE Futures Europe exchange on Monday.

In addition to Iraq, data from industry group, the American Petroleum Institute (API) on U.S. crude stocks is due later in the day and will acts as pointer to the more widely watched figures from the U.S. Department of Energy (DoE) due on Wednesday.

API said crude stocks rose 1.5 million barrels last week, while DoE data showed a drop of 2.596 million barrels, with expectations this week for a gain of 250,000 barrels.

Overnight, crude futures rose on Monday as violence in Iraq escalated as a Sunni insurgency continued to advance to Baghdad, though an International Monetary Fund decision to trim its 2014 growth forecast for the U.S. watered down oil's gains.

Radical Sunni Islamic insurgents continued to march towards Baghdad on Monday after seizing control of key northern Iraqi cities, with reports of massacres arising, spooking investors in Monday trading with fears the country's oil supply may be disrupted.

Still, Iraq's main oilfields remain far to the south of the insurgency, which watered down oil's gains as did an International Monetary Fund decision to cut its U.S. growth forecast for 2014 due to an unusually harsh winter along with a "still-struggling housing market" will drag on recovery.

In its post-invasion recovery, Iraq has become a key participant in global oil markets, with production and exports surpassing prewar levels. It has served as a source of replacement barrels since global supplies have been lost to violence in Libya and sanctions against Iran. As such, any threat to its output or growth projections could have a strong impact on markets.

The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April.

Positive U.S. data helped stabilize oil prices though they did drift in and out of positive territory at times.

The Federal Reserve Bank of New York reported earlier that its general business conditions index increased to 19.28 this month from 19.01 in May. Analysts had expected the index to decline to 15.0.

A separate report showed that U.S. industrial production rose by 0.6% last month, beating forecasts for a 0.5% gain.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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