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. Last Updated: 07/27/2016

Global Signs Bode Ill for Oil Prices

LONDON -- Oil prices fell Thursday as the market saw no sign of a halt to oil flow from potential trouble spots Iraq and Nigeria.

International benchmark Brent futures was 8 cents lower, at $10.81 a barrel, in afternoon trading in London, hugging a tight range in the absence of market-moving news.

Market bulls have had no encouragement this week with a Reuters survey showing OPEC overshooting its target for production cuts designed to lift prices, production in Nigeria's troubled Niger Delta slowly returning to normal after disturbances and no sign of a threat to Iraqi oil exports.

"Basically, it is range-bound so you just sit back and wait for it to break out of the range and see what fundamentals are attributing to that," a London broker said.

"It is very happy going backward and forward at the moment and it's going to sit there," he said, adding that the downside was limited until the market saw some hard news to justify a move.

The United Nations' announcement Wednesday that the world body would no longer allow U.S. and British citizens to work in its humanitarian program in Iraq had no impact on oil prices Thursday after it became clear oil exports under the UN-backed "oil-for-food" program would not be affected.

The UN decision, which applies to only two Americans in Baghdad, was made after Iraqi authorities said anger in Iraq was so high following U.S. and British airstrikes that the staffers' safety could not be guaranteed.

None of the oil program monitors now in Iraq are from the United States or Britain, and a Western diplomat familiar with the situation said he saw no substantial effect on the program under which Iraq sells oil to buy food and medicine.

Brimming crude oil storage tanks in major consumer centers have depressed markets since late 1997, forcing oil analysts to slash their forecasts for oil prices in both 1999 and 2000.

The World Bank on Wednesday forecast that crude oil prices this year would average just $12 a barrel, and edge up to $15 in 2000 if the Organization of Petroleum Exporting Countries is successful in reining in its production.

OPEC ministers, meanwhile, seem unable to agree on a clear way forward in markets via further production cuts but there are signs some are worried.

Algerian Oil Minister and current OPEC President Yousef Yousfi, took time off from a seminar in Norway to meet his Norwegian counterpart but there were no details of their talks.

Yousfi has pleaded for cooperation with non-OPEC producers like Norway and Mexico to help lift prices, which risk falling below last year's average of $13.34 a barrel if the current glut persists.

OPEC giant Saudi Arabia surprised the market Thursday by announcing price increases for most of its crude oil exports to Asia, Europe and the United States.

Refinery profits have started recovering after hitting a two-year low in January but traders believe the market for crude oil is still too weak to explain the Saudi price increases.