* Frigid winter in North America drains oil supply
* Dollar near 6-week lows, supports commodities
* World powers and Iran resume nuclear talks on Tuesday
By Florence Tan
SINGAPORE, Feb 18 Brent crude was little changed
on Tuesday, staying above $109 a barrel, as robust demand for
heating purposes from North America and a weak dollar offset
concerns over disappointing U.S. data.
Brent crude was trading at $109.08 a barrel by 0302
GMT, holding just below Monday's close of $109.18 - the highest
settlement since Feb. 7.
U.S. crude was up 42 cents at $100.72 a barrel. There
was no settlement on Monday as U.S. markets were shut for
Presidents' Day holiday.
"There's obviously general support from the cold weather and
support is also coming from the U.S. dollar weakness," said Ric
Spooner, chief analyst at CMC Markets in Sydney.
"On the other hand, the general run of disappointing
economic statistics from the U.S. including retail sales and
non-farm payroll was probably a consequence of cold weather.
"Market will be more comfortable when we get through the
cold weather and see those figures return to trend levels."
A slew of disappointing U.S. data pinned the dollar near
six-week lows against a basket of currencies on Tuesday, while
investors will scour the minutes of Federal Reserve's last
policy meeting on Wednesday and China's manufacturing data on
Thursday for clues on the health of the global economy.
A weak dollar supports commodities priced in the greenback
by making them cheaper for holders of other currencies.
LOW OIL INVENTORIES
Oil prices also drew support from a report that showed
developed countries started the year with the lowest oil
inventories since 2008.
Oil inventories in the developed world plummeted by 1.5
million barrels per day (bpd) in the last three months of 2013,
the steepest quarterly decline since 1999, the International
Energy Agency (IEA) said in its monthly report last week.
The oil demand outlook for 2014 has also improved as global
agencies the IEA, OPEC and the U.S. Energy Information
Administration have all raised their forecasts on stronger
economic growth in Europe and the United States.
Political instability in Libya added to global supply
concerns. Libya's oil production has dropped to 390,000 bpd,
some 70,000 bpd less than last week, as protests have partly
blocked flows from the El Sharara oilfield, the state National
Oil Corp said.
On Tuesday, Iran and the world powers will start
negotiations to strike a long-term nuclear deal.
A positive outcome would be negative for oil as sanctions on
Tehran would ease, allowing the OPEC producer to export more
crude and add to global supply.
"The market's attitude is to react to news as they unfold,"
Spooner said. "If there is any advance or any progress on
lifting sanctions, that would be a positive for supply."
(Editing by Himani Sarkar)