Corrected - Brent trading around $115, near nine-month high

By Jacob Gronholt-Pedersen

SINGAPORE (Reuters) - (Corrects milestone for Brent settlement in paragraph 5)

Brent crude held near $115 a barrel on Friday, close to a nine-month high and headed for its second weekly gain on increased risks of supply disruptions from Iraq.

Iraqi government forces battled Sunni militants for control of the country's biggest refinery on Thursday. If the 300,000 barrels per day refinery stays closed, Baghdad will need to import more oil products to meet its own domestic consumption, further tightening oil markets. [ID:nL6N0P018N]

Fields south of Baghdad, where most of Iraq's 3.3 million barrels per day (bpd) of oil is produced, as well as exports remain unaffected. But heavy fighting north of the capital and foreign oil firms beginning to pull out staff pose a risk to supplies from OPEC's number two producer.

"This raises the risk of production halts in the near future, so although there are no disruptions at the moment, we do see further upside to prices," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.

Brent crude slipped 8 cents to $114.98 a barrel at 0333 GMT, after ending 80 cents higher at $115.06 a barrel, the highest settlement since Sept. 6, 2013. The contract was up 1.3 percent for the week, after rising 4.4 percent last week.

The U.S. crude oil contract , which expires on Friday, increased 27 cents to $106.70 a barrel. The contract settled 46 cents higher in the previous session, but was on course for a third weekly decline in four.

"Brent is at a high for the year, triggering some short covering and possibly adding further long positions," said Hasegawa. "The contract may go to a previous high of around $117.30 hit last August."

President Barack Obama said he was sending up to 300 U.S. military advisers to Iraq. Speaking after a meeting with his national security team, Obama said he was prepared to take "targeted" military action later if deemed necessary, although insisted U.S. troops would not return to combat in Iraq. [ID:nL6N0P0238]

(Editing by Michael Urquhart)