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London - Global oil prices drifted lower on Thursday, with Brent slipping underneath $114 per barrel as traders took profits but kept a close eye on conflict in Iraq.
In late morning London deals, Brent crude for delivery in August fell eight cents to $113.92 a barrel.
US benchmark West Texas Intermediate for August slid one cent to $106.49 a barrel, with losses capped by a report that Washington is to lift a decades-old crude export ban.
The oil market had hit nine-month peaks last week, but has since fallen back as fears faded over supplies from key crude producer Iraq.
"Both crude benchmarks slipped over the past week, correcting lower in small-scale profit-taking," said VTB Capital analyst Andrey Kryuchenkov.
"Importantly, despite ongoing violence in Iraq, supplies remain largely unaffected by the militant advance."
Later on Thursday, investors will scrutinise a slew of latest economic figures, including personal income, personal spending and initial jobless claims data for further clues about health of the US economy.
Syria's air force struck Sunni militants inside Iraq this week, Prime Minister Nuri al-Maliki said Thursday, as British Foreign Secretary William Hague visited Baghdad to urge its leaders to unite.
Maliki's confirmation of the air raids, which he said he "welcomed" but did not request, came after powerful Shiite cleric Moqtada al-Sadr vowed to "shake the ground" under the feet of advancing Sunni militants, risking ratcheting up already-high sectarian tensions.
US military advisers, meanwhile, began meeting Iraqi commanders who have had more success in recent days in holding off militant assaults on key towns and infrastructure after wilting in the face of the initial onslaught two weeks ago.
Despite ongoing supply fears over violence Iraq - the second biggest OPEC producer after Saudi Arabia - the nation's oil output has yet to be impacted.
"Brent crude oil prices dropped ... as the majority of Iraq's oil production remained unaffected by the militant attacks," added Inenco analyst Nadina Ball.
"However, fears over the ongoing conflict have kept a floor under prices."
Analysts added that oil prices retained some support from a Wall Street Journal article which said the United States was easing its longstanding ban on crude exports.
The report late on Tuesday said that the US Commerce Department approved the first exports of unrefined oil in nearly four decades, potentially clearing the way for a bigger policy change that could tighten the US crude market.
