* Libyan rebels invite foreign firms to buy oil from seized
* Libya's El Sharara field to reach full production by
* U.S. crude stocks set to fall for sixth straight week
By Jacob Gronholt-Pedersen
SINGAPORE, Jan 8 Brent crude rose towards $108
per barrel on Wednesday, supported by new worries over Libyan
supplies and expectations of another drop in U.S. crude
Although Libya may boost production to nearly 600,000
barrels per day (bpd) by later Wednesday, tensions in the North
African country escalated after a heavily armed autonomy group
invited foreign companies to buy oil from seized ports.
"The situation looks quite uncertain, and I don't think
exports will resume smoothly," said Tetsu Emori, a commodities
fund manager at Astmax Investments.
"Along with increased tension in Iraq and the possible
negative impact on oil exports there, oil prices will probably
stay supported," said Emori.
Brent crude for February delivery was 13 cents
higher at $107.48 per barrel at 0351 GMT, after settling up 62
cents on Tuesday.
U.S crude for February delivery was up 28 cents at
$93.95 per barrel, after settling up just over a quarter of a
Production at Libya's El Sharara oilfield rose to 277,000
barrels per day (bpd) on Tuesday, with full output capacity of
340,000 bpd expected later on Wednesday, an official at the
state-run National Oil Corp. said.
However, a pro-autonomy group in eastern Libya said it would
invite foreign companies to buy oil from seized ports and
protect arriving tankers, challenging Tripoli's promise to use
force to stop them.
Earlier this week, Libya's navy fired at a Malta-flagged
tanker it said had tried to load oil at Es-Sider port, which has
been seized by the pro-autonomy group.
CRUDE STOCKS DOWN
At least five refineries in the United States and Canada
curtailed operations after bitterly cold temperatures caused
malfunctions and, in a few cases, full-scale closures.
The reduced refining activity has reduced demand for crude,
but the extreme cold could also hurt demand for oil products
such as gasoline.
The frigid weather shut down units at Marathon Petroleum
Corp's Detroit refinery on Tuesday, a day after a
cold-related equipment failure at Exxon Mobil Corp's
plant in Joliet, Illinois.
Commercial crude oil inventories in the United States are
likely to have fallen 900,000 barrels last week, a Reuters poll
of analysts showed on Tuesday. A fall would mark the sixth
straight week of declines and extend a near record drop in
Data from the American Petroleum Institute (API) released
late on Tuesday showed a much larger 7.3-million-barrel drop in
crude oil stocks, and builds in fuel inventories of more than 5
The more closely watched weekly inventory report from the
U.S. Energy Information Administration (EIA) is due at 1530 GMT
Last week, oil prices were dragged down after distillate
stocks rose to their highest level in just over two months as
demand for the fuel took a hit.
"It's not easy to interpret U.S. inventory data at the
moment, but lower crude stocks could be supportive of WTI," said
While crude output in the United States is approaching
record highs, the pace of production growth will begin to slow
in 2015, the EIA forecast on Tuesday.
U.S. output is likely to rise by 9 percent or 750,000 bpd
next year, compared to an expected rise of 1 million bpd this
year, the EIA said.
(Reporting By Jacob Gronholt-Pedersen; Editing by Tom Hogue)