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. Last Updated: 07/27/2016

Oil Prices Fall as UN, Iraq Talks Drag On

LONDON -- World oil prices fell Monday as talks at the United Nations dragged on over a compromise Security Council ruling on Iraq, which traders said could push back the date for any U.S. attack on Baghdad.

The threat of war in the Middle East and the possibility of disruption to oil supplies has lifted the cost of crude by 50 percent this year, keeping it close to $30 a barrel since August.

Benchmark Brent crude oil slipped 48 cents to $27.36 a barrel by late morning in London, while U.S. crude futures dropped by 40 cents to $29.20.

"The market is drifting lower as a result of the lack of developments in New York," said Nauman Barakat, a trader at FIMAT International Banque, referring to the UN talks.

U.S. Secretary of State Colin Powell said Sunday that Washington would introduce a compromise resolution to the United Nations Security Council this week.

The steep rise in oil prices has hit a fragile global economic recovery and hiked fuel prices at the pump.

Traders fear that an attack on Iraq might disrupt crude exports from other Middle East producers, which supply about a third of world oil.

Iraq has the capacity to export over two million barrels of crude every day under the UN oil-for-food program, but its sales have been running far below that due to disputes over pricing.

Iraq ranked as eighth-largest oil exporter last year.