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Supply outlook hits crude; Brent sinks to lowest in a year

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Brent crude oil fell to a 13-month low on Tuesday as increased OPEC production helped dampen concerns over potential supply disruptions in Iraq and Libya.

A plunge in German analyst and investor market sentiment to the lowest level in more than 1-1/2 years because of the crisis in Ukraine pressured German shares and fueled worries about demand for petroleum.

September Brent crude was down nearly $2 under $103 per barrel, after falling as low as $102.65, its weakest since July 1, 2013. The September contract expires on Thursday. U.S. crude for September ended 71 cents lower at $97.37 a barrel.

The International Energy Agency (IEA) said that while the situation in several producer countries was "more at risk than ever," supplies were ample and the Atlantic Basin was facing a glut.

OPEC output hit a five-month high of 30.44 million barrels per day (bpd) in July with a 300,000-bpd rise led by Saudi Arabia and Libya, the IEA said. Libya's output remains around 450,000 bpd despite clashes between armed factions in Tripoli and Benghazi, a National Oil Company spokesman said on Monday.

The IEA said Libya's output reached 430,000 bpd in July.

Production in Iraqi Kurdistan remains largely unaffected and July exports from southern Iraq held at near record levels of around 2.5 million bpd.

--By Reuters. For more information on commodities, please click here.

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