* Brent set to end week nearly flat as liquidity dries up
* Cushing inventories fall further, near minimum operating
* Libya oil production rises to 500,000 barrels per day
By Jacob Gronholt-Pedersen
SINGAPORE, July 25 Brent crude held steady above
$107 a barrel on Friday, on track to end the week flat as
tensions in oil producing regions supported prices against weak
demand and plentiful supplies.
Oil prices have traded in a tight range this week with
robust economic data from the United States, China and the euro
zone also failing to push prices higher.
"It is very unusual that big geopolitical events such as
Iraq, Ukraine and Gaza, which normally are very sensitive to the
price of oil, almost haven't affected prices," said Jonathan
Barrett, chief investment officer at Ayers Alliance in Sydney,
noting that trading volumes have dropped off.
"The only conclusion we can draw is that the world is awash
with oil," he said.
Brent crude for September delivery traded 10 cents
higher at $107.17 a barrel by 0434 GMT. The contract had closed
96 cents lower on Thursday.
U.S. crude for September delivery was down 5 cents at
$102.02 a barrel, after settling $1.05 lower.
Conflicts in Ukraine, Gaza and Iraq raged on, but failed to
push prices higher as global supplies remained ample.
In Libya, oil production has risen to 500,000 barrels per
day, but there is no progress on reopening Brega oil port after
an agreement to end a protest there, a spokesman for state-run
National Oil Corporation said.
Gazan authorities said Israeli forces shelled a shelter at a
U.N.-run school on Thursday, killing at least 15 people as the
Palestinian death toll in the conflict climbed higher than 760
and attempts at a truce remained elusive.
Members of the European Union on Thursday also considered
proposals targeting state-owned Russian banks vital to Moscow's
faltering economy in what would be the most serious sanctions so
far over the Ukraine crisis.
U.S. ECONOMY, OIL INVENTORIES
Further supporting oil prices, U.S. Labor Department
unemployment data suggested that the economic recovery remained
on track, with initial weekly jobless claims falling to their
lowest since February 2006.
However, the International Monetary Fund chopped its 2014
forecast for global economic growth to take into account
weakness early in the year in the United States and China, the
world's two biggest economies.
"The market seems to be quite happy to be in a range,"
Barrett said. "None of the big players are pushing [the market]
around. And if you don't have the volume in the market, it
doesn't create the opportunity for large movements."
Oil inventories in Cushing, Oklahoma, fell another 163,000
barrels over the four days to July 22, data from Genscape Inc
showed on Thursday, deepening a slump that has already dragged
stockpiles to their lowest in six years.
Drawdowns at Cushing - delivery point for West Texas
Intermediate contracts - have dropped stocks there to near what
traders consider to be minimum operating levels, fuelling a
sharp rise in prompt U.S. crude oil prices.
The gap between U.S. oil futures and Brent CL-LCO1=R
narrowed to as little as $4.47 this week, near a three-month
low, although it widened again to $5.15 on Friday.
(Editing by Tom Hogue)