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Oil prices up on OPEC forecast, Iraq jitters

The price of oil edged higher above US$104 on Wednesday, ahead of an OPEC meeting in Europe that is expected to keep production levels steady for the year even as demand looks set to grow.

By early afternoon in Europe, benchmark U.S. oil for July delivery was up 11 cents to US$104.46 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract fell 6 cents.

Brent crude, a benchmark for international oils, was up 42 cents to US$109.94 a barrel on the ICE Futures exchange in London.

Wednesday's OPEC meeting is largely expected to keep the cartel's output target of 30 million barrels a day unchanged.

“For months now, the OPEC basket price has been moving within a comfortable range of between $100 and US$110 per barrel,” said analysts at Commerzbank in a note to clients. “There is no reason for the OPEC members to take any sort of surprising decision that would disturb this equilibrium, as this is the status quo that is preferred by all parties.”

The U.S. Energy Department's weekly stockpiles report is due out later Wednesday. It is expected to show falls of 1.2 million barrels in crude oil stocks and of 500,000 barrels in gasoline stocks for the week ended June 6, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

In other energy futures trading on Nymex:

— Wholesale gasoline rose 1.18 cents to US$2.986 a gallon.

— Natural gas slipped 0.3 cents to US$4.527 per 1,000 cubic feet.

— Heating oil added 1.06 cents to US$2.894 a gallon.

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