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Oil prices hover below $102 as Iran tensions bubble

Benchmark crude was down 16 cents at $101.64 per barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

Oil prices hovered below $102 a barrel on Thursday in Asia amid conflicting reports about whether Iran is cutting crude exports to Europe.

Benchmark crude was down 16 cents at $101.64 per barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.06 to settle at $101.80 per barrel in New York on Wednesday.

Brent crude was steady at $118.93 per barrel in London.

Iran's state media reported early on Wednesday that the country was taking steps to cut off oil exports to six European countries ahead of a European embargo on Iranian oil coming into effect. Later on Wednesday, state TV quoted a Foreign Ministry spokesman saying crude oil exports to Europe have not yet been cut.

"Contradictory information has emerged as to whether Iran will voluntarily halt the supply of its crude to Europe before EU sanctions become effective," Barclays Capital said in a report. "To some extent, it does not matter too much: some similar move has been widely anticipated, and those oil flows are inevitably stopping soon in any case."

Stopping Iranian shipments would mean European refineries will have to find new sources of oil sooner than they expected. The European Union, which buys about 18 per cent of Iran's total crude exports, had planned to embargo Iranian oil this summer to pressure the country to abandon its nuclear program.

Western nations, including the US, fear that Iran is building a nuclear weapon. Iran denies the claim.

In other energy trading, heating oil was down 1.2 cents at $3.18 per gallon and gasoline futures slid 1.3 cents to $3.16 per gallon. Natural gas rose 0.7 cent to $2.43 per 1,000 cubic feet.