SINGAPORE: Brent futures dipped towards $113 a barrel on Monday, adding to last week's fall as supply disruption fears from Iraq eased as government forces launched a pushback against a Sunni militant takeover of large areas of the country.
The European benchmark is still up 3.4 percent so far in June, on track for its best monthly showing since August after touching a nine-month high earlier in the month, while the US contract is up nearly 3 percent, driven primarily by supply fears.
Brent crude lost 22 cents to $113.08 a barrel by 0240 GMT, after ending the week 1.3 percent lower. US crude declined 26 cents to $105.48 a barrel, after sliding nearly 1.4 percent in the past week.
"We saw some profit-taking last week after sharp gains in prices and we are seeing that continuing," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.
"It is a bit difficult to bet on oil on both sides at the moment. Overall the market seems to be headed lower with range bound trades."
Brent faces support at $112 a barrel and key resistance at $115, while the US contract has strong support a little below $105 and resistance at the $107-$108 level, Hasegawa said.
Iraq is the second-largest producer in the Organization of the Petroleum Exporting Countries and the bulk of its shipments are from the country's south - an area that has so far been largely unaffected by the unrest.
To recapture parts of the north, the army sent tanks and armoured vehicles to dislodge insurgents from the northern city of Tikrit in the second day of a pushback. The market also drew comfort from a meeting between US Secretary of State John Kerry and Saudi King Abdullah in which the two briefly discussed global oil supplies during a meeting on the crisis in Iraq. The meet assured investors that top exporter Saudi Arabia may step in to fill any gap if supplies from Iraq get disrupted.
"We have some guarantee of supply that Saudi Arabia will step in if needed," said Hasegawa.
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