* U.S. crude stocks seen up by 1.8 mln barrels -poll
* Iran says exporting just 1 mln b/d, much less than IEA
By Keith Wallis
SINGAPORE, April 15 Brent crude futures dropped
below $109 a barrel following a surge to a six-week high in the
previous session, as investors looked ahead to a meeting in
Geneva that they hoped would bring a political resolution to the
escalating crisis in Ukraine.
The United States and the European Union are considering
further sanctions against Moscow after pro-Russian separatists
on Monday ignored an ultimatum to leave occupied government
buildings in eastern Ukraine.
Tightening of the sanctions is likely to depend, in part, on
the outcome of the meeting in Geneva on Thursday that will
involve the EU, the United States, Russia and Ukraine.
"Talks are being arranged between Western powers, Russia and
Ukraine to resolve the current crisis through diplomatic
efforts, so there has been an easing of crude oil prices," said
Tan Chee Tat, investment analyst at Singapore's Phillip Futures.
Brent crude fell 53 cents to $108.54 by 0436 GMT
after rising by almost $2 to close at $109.07. It pushed above
its 50-, 100- and 200-day averages in the previous session.
U.S. oil dropped 71 cents to $103.34 a barrel,
pressured by expectations of a rise in U.S. crude inventories.
In a tense phone call U.S. President Barack Obama told
Russian President Vladimir Putin that Moscow would face further
costs for its actions in Ukraine and should use its influence to
get separatists in the country to stand down.
Obama also told Putin that Moscow's actions in Ukraine were
not conducive to a diplomatic solution.
The EU agreed on Monday to expand a list of people to target
with sanctions for their suspected role in violating Ukraine's
territorial integrity. The EU could also hold an emergency
summit next week to adopt further measures.
The Ukraine crisis, and in particular the annexation of
Crimea by Russia last month, have led to the most strained
relations between Moscow and the West since the Cold War.
The geopolitical tensions were lending support to oil amid
expectations of more supplies and rising inventories, Tan said.
Investors are watching developments in Libya where the
government had still to take control of the eastern Zueitina oil
port a week after an agreement with a federalist rebel group to
reopen it along with the Hariga terminal.
U.S. crude stocks likely rose by 1.8 million barrels in the
week ended April 11, a preliminary Reuters poll showed ahead of
inventory reports due later Tuesday and Wednesday.
Iran said it was exporting 1 million barrels per day, much
less crude than the International Energy Agency (IEA) estimate
of around 1.65 million bpd sales in February.
(Editing by Tom Hogue)