Brent rises to $110 on Libya violence, fall in output
* Armed gunmen storm Libya's parliament on Sunday
* Libyan oil output falls to 200,000 bpd, from 300,000 bpd last week
* Obama, Hollande agree Russia to face further costs over Ukraine
* Iran, Western powers make little progress in talks last week
By Jacob Gronholt-Pedersen
SINGAPORE, May 19 (Reuters) - Brent crude rose to $110 a barrel on Monday on renewed concerns over Libya's oil output and following some of the worst violence in Tripoli since the 2011 war against Muammar Gaddafi.
Heavily armed gunmen stormed Libya's parliament on Sunday and demanded its suspension, claiming loyalty to a renegade army general and deepening the chaos in the OPEC oil producer.
"This is the worst outbreak of militia-related violence for a while and a reversal of the relatively positive sentiment that we had from Libya earlier in the month," said Mark Keenan, who heads commodities research in Asia at Societe Generale.
"It's very likely that Libya is going to retain a strong geopolitical risk premium in oil markets going forward," Keenan said.
Brent July crude gained 23 cents to $109.98 a barrel by 0358 GMT, after earlier touching an intraday high of $110.03. Front-month Brent ended last week nearly 2 percent higher.
U.S. crude rose 17 cents a barrel to $102.19, after settling 52 cents a barrel higher on Friday. The June WTI crude contract expires on Tuesday.
In April, an end to a month-long blockade of key oil ports in eastern Libya, raised the prospect of more Libyan crude exports and weighed on global oil prices. But last week, just opened oil fields were closed again and clashes erupted in the east, with 43 people killed and more than 100 wounded in Benghazi.
The country's output fell to about 200,000 barrels per day (bpd) from 300,000 bpd earlier last week, and it remains far below the 1.4 million bpd produced last year.
The conflict in Ukraine provided further support as U.S. President Barack Obama spoke with French President Francois Hollande about the situation on Friday, the two agreeing that Russia faces "significant" further costs if it continues provocative and destabilising behaviour.
Russia, meantime, is ready to discuss a gas price discount for Ukraine if Kiev pays off the more than $2.2 billion it owed as of April 1, Energy Minister Alexander Novak said.
Russia has warned that it will not supply Ukraine with gas in June unless Kiev pays in advance by June 2, raising fears that deliveries to Europe could be affected.
A shortage of natural gas in Europe could prop up demand for substitute fuels such as oil.
Iran and six world powers made little progress last week in talks on ending their dispute over Tehran's nuclear programme, U.S. and Iranian officials said. Their comments raised doubts over the prospects for a breakthrough by July 20, which marks the end of a temporary agreement that eases some sanctions against the key oil producer.
Oil prices also found support from data showing U.S. housing starts jumped in April and building permits hit their highest level in nearly six years, indications that the world's top economy is gaining traction. (Editing by Tom Hogue)