* Oil workers in Libya preparing to load crude onto tankers
* With tumbling equities, some investors flee to energy
* Oil supported by increased tension in Ukraine
By Jacob Gronholt-Pedersen
SINGAPORE, April 8 Brent crude climbed above
$106 a barrel on Tuesday supported by increased tensions between
Russia and the West over Ukraine, while gains were capped by
news that Libya prepared to load crude onto tankers from newly
Oil prices were supported by renewed tensions in Ukraine,
which raised concerns about the possibility of a deeper
diplomatic rift between Russia, the world's biggest oil
producer, and the West.
Brent crude for May delivery was up 27 cents to
$106.09 a barrel at 0351 GMT after settling down 90 cents. U.S.
crude for May gained 49 cents to $100.93 a barrel after
it settled 70 cents lower.
The rise in oil prices also came amid a broad retreat in
global equity markets and a weakening of the dollar.
"One of the reasons we are seeing support for Brent is that
investors are returning to the basics and the very clear
underlying upward trend we have in global growth. Here, energy
is one of the prime candidates," said Michael McCarthy, chief
strategist at CMC Markets in Sydney.
The Nasdaq Composite on Monday saw its worst
three-session decline since November 2011, while the S&P 500's
three-day fall was its steepest since late January.
"Share markets have been running well ahead of earnings, in
many cases at record highs, and that's getting a lot of
investors nervous," McCarthy said.
Gains were checked by the prospect of additional Libyan
supplies after rebels agreed to gradually end their eight-month
blockade of key oil ports accounting for around 700,000 barrels
per day (bpd) that had curbed exports from the OPEC member.
At Libya's 70,000 bpd Zueitina oil port located 100 km west
of Benghazi, maintenance personnel, some of them foreign
workers, in red jump suits and helmets were on Monday busy
preparing to load crude into tankers .
"We are talking potentially one percent of daily global
supply (from Libya). While that's not insignificant, that's not
a game changer either," said McCarthy.
In eastern Ukraine, pro-Moscow protesters seized arms in one
city and declared a separatist republic in another, in moves
Kiev described as part of a Russian-orchestrated plan to justify
an invasion to dismember the country.
Kiev said the overnight seizure of public buildings in three
cities in eastern Ukraine's mainly Russian-speaking industrial
heartland was a replay of events in Crimea, the Black Sea
peninsula Moscow seized and annexed last month.
The rise in oil prices was also capped by hopes over easing
tension between Iran and the west as the OPEC member said it
hopes enough progress will be made this week to enable
negotiators to start drafting by mid-May a final accord to
settle a long-running dispute over its nuclear programme.
The Islamic Republic and six world powers will hold a new
round of talks in Vienna on Tuesday and Wednesday intended to
reach a comprehensive agreement by July 20 on how to resolve a
U.S. commercial crude oil stockpiles were expected to have
risen last week, while inventories of refined oil products
likely slipped, a preliminary Reuters poll of four analysts
showed on Monday.
The survey, taken ahead of weekly inventory reports from
industry group the American Petroleum Institute (API) and from
the U.S. Department of Energy's Energy Information
Administration (EIA), showed crude stocks rising 1.9 million
barrels on average for the week ending April 4.
(Reporting by Jacob Gronholt-Pedersen; Editing by Sunil Nair)