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UPDATE 3-Oil slips below $106 on oversupply, weak demand

* Atlantic basin crude supply ample, refinery demand slack

* Brent posts biggest loss in July since April 2013

* WTI falls 6.8 percent in July, weakest month since May 2012

* Major WTI consumer shuts refinery for four weeks

* Coming Up: U.S. non-farm payrolls for July at 1230 GMT

(Updates throughout, changes dateline, previous SINGAPORE)

LONDON, Aug 1 (Reuters) - Brent crude oil fell below $106 a barrel on Friday as oversupply in the Atlantic basin and low demand outweighed worries over political tensions in the Middle East, North Africa and Ukraine.

Analysts says they expect global oil production to exceed demand this year and a supply glut has already built up in Africa and Europe.

Worries over geopolitical risks to oil supply have eased despite escalating violence in parts of the Middle East and North Africa.

"There is also an overhang of light-sweet crude in the Atlantic Basin in line with the low crude intake levels and higher availability of U.S. and Canadian crude imports," JBC analysts said in a report to traders.

Brent crude was down 20 cents at $105.82 a barrel by 0850 GMT after a 5.6 percent loss last month, its biggest fall since April 2013.

U.S. crude futures fell 67 cents to $97.50 a barrel, following a 6.8 percent decline last month, the biggest monthly loss since May 2012.

The front of the Brent futures price curve is trading at a heavy discount to later barrels in a formation known as a contango. This has now lasted longer than any contango since early 2011, Morgan Stanley analyst Adam Longson said.

"(This reflects) weak physical demand and an oversupplied Atlantic Basin," Longson said. "By fourth quarter, we expect to see a more balanced global crude market."

Oil investors say they are less worried now than a month ago about the risk to oil supplies from conflicts and civil turmoil despite heavy fighting in many countries.

OPEC's second largest producer, Iraq, is battling an Islamic insurgency in the north and west. The conflict threatens to split the country, but has yet to have an impact on near-record oil exports from the south.

Baghdad is also embroiled in a dispute with Iraqi Kurdistan over oil exports via Turkey.

In Libya, oil output remains around 500,000 barrels per day (bpd), down from 1 million bpd in 2012, following weeks of clashes between rival militias.

Energy investments in Russia also faced delays after sanctions imposed by the United States and European Union limited access to funds.

(Additional reporting by Florence Tan; Editing by)