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Oil declines second day after Iraq exports approach record high

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Oil fell a second day after Iraq's oil exports approached a record high in April, adding barrels to a worldwide supply glut.

[SYDNEY] Oil fell a second day after Iraq's oil exports approached a record high in April, adding barrels to a worldwide supply glut.

Futures declined as much as 0.8 per cent in New York after dropping 0.2 per cent Friday. Iraq, excluding sales from the Kurdistan Regional Government, shipped 3.36 million barrels a day last month, an oil ministry spokesman said by text message on Sunday.

Exports rose from March's 3.29 million barrels a day and neared the record 3.365 in November. Operations weren't affected Sunday after protesters stormed parliament in Baghdad, threatening to paralyze the government of Opec's second-largest producer.

Oil has rebounded after slumping this year to the lowest since 2003 as US production has slipped below 9 million barrels a day. Iraqi demonstrators accused the government of putting off necessary reforms as it struggles in the fight against Islamic State militants and sees its finances battered by collapsing oil prices.

"The market is probably going to look at the high exports and think that's great and is shrugging off politics" in Iraq, Jaafar Altaie, managing director of Manaar Energy Consulting, said by phone from Abu Dhabi. "Markets are ignoring geopolitics and it will be to their detriment."

West Texas Intermediate for June delivery lost as much as 37 cents to US$45.55 a barrel on the New York Mercantile Exchange and was at US$45.67 at 10.11am Sydney time. The contract fell 11 cents to $45.92 on Friday. Total volume traded was about 40 per cent below the 100-day average.

Brent for July settlement dropped as much as 37 cents, or 0.8 per cent, to US$47 a barrel on the London-based ICE Futures Europe exchange. The June contract closed down 1 cent to expire Friday at US$48.13 a barrel. The global benchmark was trading at a 68 cent premium to WTI for July.

BLOOMBERG