Brent holds above $112/bbl as lingering supply fears support

Brent futures held above $112 a barrel on Wednesday as lingering worries over the threat of a sudden worsening in the Iraq crisis supported prices, while a possible reopening of two oil terminals in Libya kept the gains in check. The European benchmark dropped for a third day to trade near its lowest in nearly three weeks, but limited spare production capacity amid an improving demand outlook in China and the United States, the top two oil consumers, should help underpin the market.

Brent crude swung between $112.41 and $112.08 a barrel and was up 1 cent at $112.30 by 0622 GMT, after its lowest settlement since June 11. US oil added 11 cents to $105.44. It also recorded its lowest ending since June 11.

Libyan rebels blockading key eastern oil ports have agreed to reopen the remaining two terminals at Es Sider and Ras Lanuf. Since last summer the port seizures have crippled Libya's oil industry.