U.S. crude fell on Thursday, with Brent also trading lower as fears eased over export disruptions from war-ravaged Iraq, OPEC's second-largest producer.
Oil hit a nine-month high a week ago on fears that conflict in Iraq could split the country and hit oil exports, but it has since retreated slightly as production has been largely unaffected by the fighting.
Iraq's southern oilfields, which produce the majority of the nation's 3.3 million barrels a day, remained safe, said Nickolay Mladenov, United Nations special envoy to Iraq. But insurgents and Iraq government forces continued to fight on Wednesday for control of the country's largest refinery, the 300,000-barrels-per-day Baiji complex, with troops being airlifted into the site by helicopter.
Brent crude fell 80 cents to near $113 a barrel, having fallen in the past four sessions after hitting its highest since September at $115.71 last Thursday.
U.S. crude fell by 66 cents to settle at $105.94 a barrel. It had gained 47 cents in the previous session on news Washington would allow exports of condensate, an ultra-light oil, in a marginal relaxation of a 40-year ban on U.S. oil exports. Still, it lost ground after lackluster U.S. consumer spending data to revise down expectations for growth this quarter.
Michael Hewson, an analyst at CMC Markets, said disappointing U.S. economic data in the previous session helped to cap oil prices. U.S. consumer spending rose less than expected in May, which could prompt economists to temper their second-quarter growth forecasts.
On Tuesday, the U.S. Department of Commerce ruled that some energy companies may export a variety of ultra-light oil if it has been minimally refined, in what may be a marginal loosening of a decades-old ban on selling U.S. crude abroad.
Enterprise Products Partners, one of two companies given Department of Commerce approval on Tuesday to export condensate, said it could start exporting any time. Also putting pressure on prices, U.S. crude inventories unexpectedly rose by 1.74 million barrels last week to 388 million barrels, data from the U.S. government's Energy Information Administration showed.
--By Reuters. For more information on commodities prices, please click here.