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NYMEX-U.S. crude up for 2nd day on Iraq supply risks

SEOUL, June 20 (Reuters) - U.S. crude futures climbed towards $107 a barrel in early Asian trade on Friday, supported by the risk of conflict in Iraq disrupting oil supplies, as the United States said it would send military advisers to the country.

FUNDAMENTALS

* U.S. crude oil futures contract for July, which expire on Friday, increased 21 cents at $106.64 a barrel as of 0000 GMT. The contract settled 46 cents higher at $106.43 on the previous session.

* Brent slipped 12 cents at $114.94 a barrel after it previously ended 80 cents higher at $115.06 a barrel, the highest settlement since Sept. 9, 2013.

* President Barack Obama said on Thursday he was sending up to 300 U.S. military advisers to Iraq but stressed the need for a political solution to the Iraqi crisis as government forces battled Sunni rebels for control of the country's biggest refinery.

Speaking after a meeting with his national security team, Obama said he was prepared to take "targeted" military action later if deemed necessary, thus delaying but still keeping open the prospect of air strikes to fend off a militant insurgency. But he insisted that U.S. troops would not return to combat in Iraq.

* Iraqi government forces battled Sunni militants for control of the country's biggest refinery on Thursday as Prime Minister Nuri al-Maliki waited for a U.S. response to an appeal for air strikes to beat back the threat to Baghdad.

Troops loyal to the Shi'ite-led government held off insurgents from the Islamic State of Iraq and the Levant and its allies who had stormed the perimeter a day earlier, threatening national energy supplies. The conflict had not yet spread to the country's southern regions, where most of Iraq's 3.3 million bpd of oil production is processed.

* Iraq's extra demand for Turkish fuel due to the Baiji refinery attack will strain the limited border export capacity, Turkish Energy Minister Taner Yildiz said on Thursday.

* Ukraine's parliament agreed on Thursday to discuss a bill to allow gas transit facilities to be leased on a joint venture basis with participation from firms in the European Union or United States.

Suffering a third cut-off of natural gas supplies from Russia in under nine years, and with political relations in crisis, Ukraine is desperate to become less dependent on Russian gas, but at the same time to provide more reliable transit for the Russian gas that Europe needs.

MARKETS NEWS

* A leading global stock index hit an all-time high and the dollar eased on Thursday, a day after the Federal Reserve lowered its forecast for target U.S. interest rates in the long term, an outlook that lifted risk appetite around the world.

The greenback touched a three-week low against a basket of currencies at 80.147. The euro strengthened to a 10-day high against the dollar while sterling advanced to its highest versus the greenback since October 2008.

DATA/EVENTS

* The following data is expected on Friday: (Time in GMT)

DATA AHEAD (GMT)

0600 Germany Producer prices May

0800 Euro zone Current account April

0800 Italy Industrial orders April

(Reporting by Meeyoung Cho; Editing by Ed Davies)