Brent weak as US crude stocks seen rising, holds above $110 on Libya

Mon Feb 24, 2014 11:24pm EST

Related Topics

* U.S. crude stocks likely rose 1.4 million barrels-poll

* Distillates stocks seen down 1.5 mln barrels, gasoline down 1.5 mln - poll

* Libya puts ministries under special budget rules after oil revenue slump

* Brent to rise to $111.17 - technicals

By Manash Goswami

SINGAPORE, Feb 25 (Reuters) - Brent futures eased on Tuesday on expectations U.S. crude stockpiles rose for a second straight week, but held above $110 a barrel on concerns over supply following prolonged outages in Libya and other exporters.

An easing of the severe chill over the United States and Europe is likely to cut demand for heating fuels, removing a key support that has propped up oil benchmarks during a period of typically low demand. Investors are now eyeing appetite for gasoline ahead of the start of the U.S. summer driving season.

Brent crude fell 17 cents to $110.47 a barrel by 0342 GMT, after settling at its highest for the year in the previous session. U.S. oil declined 35 cents to $102.47, after ending 62 cents higher.

"After heating oil, the market will now look at gasoline demand and how that will help support oil prices," said Tetsu Emori, a commodity fund manager at Astmax Investment.

"There will be some refineries shutting down for maintenance, but it is hard to predict the direction of oil at this point."

Emori sees strong support for Brent at $105 a barrel and resistance at $115. The U.S. benchmark faces strong support at $100 but could slip to $98, if it breaks past that floor.

As the market refocuses attention to gasoline, worries of further supply disruption following continued unrest in Libya, South Sudan, Nigeria and sanctions on Iran will keep oil prices supported, Emori said.

"Oil will probably now be driven by fundamentals of the oil market itself," he said. "People are looking at the demand/supply balance in the United States and other countries."

CRUDE INVENTORIES

U.S. commercial crude stocks were expected to have risen 1.4 million barrels on average for the week to Feb. 21, a preliminary Reuters poll taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and from the U.S. Department of Energy's Energy Information Administration (EIA) showed.

That would mark an increase for a second straight week as crude oil stocks rose about 1 million barrels to 362 million barrels in the week to Feb. 14, while crude imports fell 508,000 bpd to 7.36 million barrels per day, EIA data had showed.

Stocks of distillates, which include heating oil and diesel fuel, were forecast to have fallen 1.5 million barrels on average last week, in the latest survey. Gasoline stocks were also seen down 1.5 million.

(Reporting by Manash Goswami; Editing by Richard Pullin)

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