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UPDATE 3-Brent up near $113 on supply worries as Iraq violence rises

* Sunni Islamists solidify grip on northern Iraq

* Little immediate threat seen to Iraqi oil exports

* Crude oil flow from Iraqi Kurdistan continues

(Adds fresh quotes, updates prices, previous SINGAPORE)

LONDON, June 16 (Reuters) - Brent crude rose towards $113 a barrel on Monday after a strong rally last week, as Sunni insurgents advanced in Iraq, intensifying concerns over a potential disruption to oil exports from the second-largest OPEC producer.

The eruption of violence in Iraq led to a spike in prices last week, with both Brent and U.S. crude gaining more than 4 percent - the most since July and December, respectively.

Prices rose more modestly on Friday as the market waited to see if the conflict would threaten oil refineries south of Baghdad.

"We've had the initial shock, now we need to see what sort of response there will be from the Iraqis and how successful they will be in containing this," said Ole Hansen, senior commodity strategist at Saxo Bank. "The rally now needs to be supported by real concerns about supply."

Brent crude for August delivery was up 25 cents to $112.71 a barrel by 0908 GMT, after touching an intraday high of $113.28.

The July contract, which expired on Friday, settled 39 cents higher at $113.41 per barrel, the highest settlement level since September 2013.

U.S. oil was up just 2 cents to $106.93 a barrel, after reaching an intraday high of $107.54 in Asian trading. On Friday, it rose as high as $107.68 before settling up 38 cents at $106.91 per barrel.

EXPORTS SAFE FOR NOW

On Sunday Sunni insurgents seized a mainly ethnic Turkmen city in northwestern Iraq after heavy fighting, solidifying their grip on the north.

For the moment the immediate threat to Iraq's oil supplies - most of which are hundreds of miles south of the fighting - remains limited, analysts and consultants say. Northern exports have run at a trickle for months, and few had expected a rapid recovery.

Should the militants advance south of the capital, analysts expect them to encounter much greater resistance.

A third export cargo of piped oil from Iraqi Kurdistan is scheduled to depart Turkey's Mediterranean port of Ceyhan on June 22, and crude oil from Iraqi Kurdistan is flowing as normal.

On Friday President Barack Obama said he needed several days to determine how the United States would help Iraq deal with the Islamists' advance. But he ruled out sending U.S. troops back into combat in Iraq, which U.S. troops departed in 2011.

In Libya, the western El Feel oilfield has resumed production after security guards ended a protest that lasted more than two months, oil ministry officials said, but many oilfields and ports remain blocked.

Production at El Feel will reach 80,000 barrels a day within 24 hours, an official said on Sunday.

(Additional reporting by Jacob Gronholt-Pedersen; editing by Jason Neely)