UPDATE 3-Oil flat around $107 as ample supply offsets risk premium

* Brent set to end week nearly flat as liquidity dries up

* Cushing inventories fall further, near minimum operating levels

* German Ifo data below expectations

(Updates prices, adds quote, changes dateline from SINGAPORE)

LONDON, July 25 (Reuters) - Oil held steady around $107 a barrel on Friday, as plentiful supply countered any premium to the price caused by concern over conflict in the Middle East and Ukraine.

Brent crude for September delivery traded 13 cents higher at $107.20 a barrel by 0810 GMT. The contract had closed 96 cents lower on Thursday.

U.S. crude for September delivery was down 8 cents at $101.99 a barrel, after settling $1.05 lower.

Conflicts in Ukraine, Gaza and Iraq continued, but failed to push prices higher as global supplies remained ample.

"There is ample prompt supply of crude oil, but the geopolitics in Ukraine, Gaza, Iraq and Libya is providing support," said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.

He added that poor refining margins in Europe pointed to slack demand in the region.

German business sentiment fell for a third consecutive month in July, suggesting firms in Europe's largest economy are worried about the crises in Ukraine, Iraq and Gaza.

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.


Oil prices also got support from U.S. Labor Department unemployment data which 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 cut 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.

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, fueling a sharp rise in prompt U.S. crude oil prices.

(Additional reporting by Jacob Gronholt-Pedersen in Singapore, editing by William Hardy)