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Oil price hike about fear, not Iraq output: OPEC chief

OPEC Secretary General Abdullah al-Badri speaks during a joint news conference with European Union Energy Commissioner Guenther Oettinger (unseen) at the EU Commission headquarters in Brussels June 24, 2014.

FRANCOIS LENOIR/REUTERS

The head of OPEC, the group of major oil exporters, says recent crude price increases are to blame on market fears caused by the crisis in Iraq but not on a drop in output.

OPEC Secretary General Abdullah Al-Badry said Tuesday that Iraq is "still producing as normal," with 95 per cent of its capacity in the country's south being unaffected by the violence.

The price for a barrel of Brent crude, the key international benchmark, has risen from a stable level of $110 held over the past four years to about $115 following the takeover of some parts of Iraq by Sunni insurgents.

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Al-Badry says prices are not rising because of supply shortages but because the market is "nervous" and investors are speculating.

He adds OPEC still has spare capacity.

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