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London - Oil prices steadied on Friday but Brent retained support near a nine-month peak as dealers tracked the unfolding sectarian conflict in Iraq, because it could cause major disruptions to supplies of crude.
Brent crude for delivery in August fell 12 cents to stand at $114.94 a barrel in London midday deals compared with Thursday's closing level.
US benchmark West Texas Intermediate for July edged up 3c to $106.46 a barrel.
"Predominant gains this week have derived from the ongoing siege of Iraq's largest oil refinery, Baiji," said Dorian Lucas, an analyst at energy consultancy Inenco.
"Thus far the gains in Brent crude are based around sentiment that oil supplies from Organization of the Petroleum Exporting Countries (Opec) second largest producer may be disrupted.
"Even with the siege of the Baiji oil refinery, no export supply has been disrupted, as this facility is used for the production of domestic consumption products," he noted.
On Thursday, Brent reached $115.71 a barrel -- the highest point since September.
Brent is a benchmark for the pricing of Middle East crude.
"Oil saw support from the risk of conflict in Iraq disrupting oil supplies, as the US said it would send military advisers to the country," Singapore's United Overseas Bank said in a note to clients.
US President Barack Obama on Thursday announced that he was ready to send 300 advisers to Iraq and if necessary to take "targeted" and "precise" military action to counter radical Sunni fighters.
"We will help Iraqis as they take the fight to terrorists who threaten the Iraqi people, the region and American interests as well," he said.
Washington has already positioned an aircraft carrier in the Gulf and is also considering using drone strikes against the militants.
A Congressional source has said US Secretary of State John Kerry will travel to Iraq "soon".
The militants have captured swathes of the country's north but have yet to directly threaten the key oil-producing region in the south.
The crisis has rocked the global oil market because Iraq is the second-biggest producer within the 12-nation Opec.
The country has more than 11% of the world's proved resources and produces 3.4 million barrels a day.
"Further substantial (price) gains are only expected with an actual disruption of supply," Lucas added.
"With 3.3 million barrels per day produced in the southern oil fields, which remain far removed from the conflict and exports predominantly originating from this region an actual disruption remains unlikely at present."
