Brent holds above $110 on Ukraine supply disruption risks
* Brent, U.S. crude hold near three-week highs
* Total U.S. inventories rise as Cushing stocks drop - EIA
* Libya's El Feel oilfield resumes production
By Keith Wallis
SINGAPORE May 15 (Reuters) - Brent crude held above $110 a barrel on Thursday near the highest in nearly three weeks as on-going concerns over the crisis in Ukraine outweighed mixed U.S. oil inventory data.
The exclusion of pro-Moscow separatists from talks among Ukraine's interim leaders on plans to give the eastern regions greater autonomy ahead of presidential elections on May 25 cast doubt over whether the move could defuse the political crisis.
Energy ministers from Russia and the European Union are also due to meet in Berlin on May 19 to agree a schedule for another round of talks with Ukraine to end a dispute over gas prices and supplies and avoid a potential "gas war". Russia also said it is ready to discuss gas supplies to Ukraine if it pays part of its $4 billion gas debt.
"Geopolitical fears are a key factor at least for Brent. Given the environment, you are not yet going to see a declaration of peace," said Michael McCarthy, chief market strategist for CMC Markets in Sydney.
There was potential for supply disruptions just as energy demand increased in the northern summer, he said. Half of Europe's imports of Russian natural gas go through Ukraine.
Brent crude for June delivery dropped 11 cents to $110.08 a barrel at 0414 GMT, down from $110.19 in the previous session, the highest settlement since April 24. The June contract expires on Thursday.
U.S. oil was down 30 cents at $102.07 a barrel after closing 67 cents higher at $102.37, its highest closing price since April 21.
Brent could rise to $115-118 a barrel by the end of next week, while U.S. crude could climb to $106 a barrel, McCarthy said.
Prices were driven higher in the previous session after weekly data from the U.S. Department of Energy's Energy Information Administration showed stocks at the key Cushing, Oklahoma, delivery hub fell by 592,000 barrels in the week to May 9.
Asian investors, though, are instead looking at the overall build in U.S. crude inventories causing oil prices to fall in trading on Thursday, said Jonathan Barratt, chief executive of commodity research firm Barratt Bulletin in Sydney.
U.S. crude inventories rose 947,000 barrels to 398.5 million barrels last week, as production hit a 28-year high of 8.43 million barrels, the EIA said on Wednesday.
Analysts had expected U.S. crude inventories to fall by 100,000 barrels.
A build of 2.3 million barrels to a record high of 215.7 million barrels on the U.S. Gulf Coast helped drive the overall increase in inventories, the EIA said.
"There are more reasons to sell rather than to see U.S. oil push up to $104-105. Inventory levels are at 25-year highs, Libya is coming on tap," Barratt said.
Uncertainties over Libya's oil exports and progress between Iran and Western powers over Tehran's nuclear programme are among the background concerns for the market, McCarthy said.
Production at Libya's El Feel oilfield has restarted the National Oil Corp (NOC) said on Wednesday, but output from the 340,000 barrel per day El Sharara oilfield was still halted because protesters had yet to open the pipeline to Zawiya port.
Iran and six world powers started three days of talks in Vienna on Wednesday aimed at drafting an agreement for Tehran to curb its controversial nuclear programme in exchange for a phased end to the crippling sanctions that have cut its oil exports in half over the last two years. (Editing by Tom Hogue)
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