* U.S., EU tell Russia to pull troops from Crimea or face
* U.S. crude stockpiles likely rose 1 mln bbls last week
By Florence Tan
SINGAPORE, March 4 Brent crude held above $111
on Tuesday, at its highest levels since the end of last year, as
tensions over Russia's military intervention in Ukraine rattled
global markets and stoked fears of energy supply disruption to
U.S. oil hit a 5-1/2-month high on Monday after Russia
invaded Ukraine's autonomous Crimea region at the weekend, and
the United States and the European Union have threatened
sanctions if Moscow does not withdraw its troops.
April Brent crude edged down 3 cents to $111.17 a
barrel by 0349 GMT after closing the previous session at its
highest since Dec. 27.
U.S. crude for April delivery was at $104.67, down 25
cents, hovering near its highest since Sept. 20.
"The major support at the moment is the situation in Ukraine
and the risk to European gas supply," said Ric Spooner, chief
analyst at CMC Markets in Sydney.
"There is a collective market view that they are likely to
wait on developments before they take prices any further."
Russia paid a heavy financial price on Monday for its
military intervention in Ukraine, with stocks, bonds and the
rouble plunging as investors dumped riskier assets like stocks
in favour of commodities like gold and oil.
Russia, Europe's biggest gas supplier, exports around a
third of its gas through Ukraine.
"It probably isn't in anybody's interest to stop the Russian
gas flow to the rest of Europe but it's possibly something that
might be used as a bargaining lever by either side," Spooner
said. "It would only take threats of that to see more risk
premiums build into oil price."
On technical charts, Brent has scope to move higher to the
next resistance at $115.50 a barrel as it has yet to complete
its rally, he said.
A mild winter and improved infrastructure mean Europe and
Ukraine are less reliant on Russian natural gas than in past
years, however, easing worries that the escalating crisis in
Ukraine could hurt supplies.
"It is worth bearing in mind that Europe does have quite a
significant inventory which would tide it through any short term
disruption," Spooner said.
Investors are also eyeing weekly U.S. oil inventories data
to assess demand at the world's largest oil consumer.
U.S. commercial crude oil inventories likely rose by 1
million barrels on average last week, while stockpiles of
refined oil products were expected to have dropped, a
preliminary Reuters poll of five analysts showed.
The API will release its data on Tuesday at 4:30 p.m. EST
(2130 GMT). The EIA will publish its data on Wednesday at 10:30
a.m. EST (1530 GMT).
(Editing by Tom Hogue)