* Ukraine president calls for anti-rebel offensive as peace
* China manufacturing activity shows easing pace of decline
* U.S. crude inventory rises slower than expected -API
* Libya oil output 220,000 bpd, several fields still closed
By Manash Goswami
SINGAPORE, April 23 Brent futures held above
$109 a barrel on Wednesday with the global demand growth outlook
largely unchanged after a Chinese manufacturing survey showed an
easing pace of decline, while the unfolding Ukraine crisis kept
any losses in check.
A downturn in factory activity in the world's second-biggest
oil consumer was expected - the fourth straight month of
contraction - but analysts also saw initial signs of stability
due to government efforts to underpin growth.
Ukraine's acting president, Oleksander Turchinov, called for
government forces to relaunch an offensive against pro-Russian
rebels, raising new questions on the success of last week's
Brent crude fell 7 cents to $109.20 at 0403 GMT,
after ending 68 cents or 0.6 percent lower in its biggest drop
in two weeks.
U.S. oil fell 22 cents to $101.54, after losing more
than 2 percent in its steepest decline in nearly four months.
The May contract expired, making the June contract the new front
month. Both May and June contracts fell by more than 2 percent.
"China is slowing down and that's a concern, but people
don't expect it to fall off a cliff," said Tony Nunan, an oil
risk manager at Mitsubishi Corp.
"Geopolitical concerns over Ukraine, unfinished issues such
as Syria and Libya, are keeping prices supported."
Going by fundamentals and without the current risk premium
on oil, Brent should be closer to $100 a barrel with the U.S.
benchmark around $90, Nunan said.
"People expect nothing is going to happen over Ukraine, but
there is that 'but'," Nunan said.
Oil is also drawing support on expectations stockpiles in
the world's top consumer the United States rose slower than
expected last week. Crude inventories rose by 519,000 barrels in
the week ended April 18, data from industry group the American
Petroleum Institute showed, compared with analysts' expectations
for a increase of 2.3 million barrels.
Gasoline stocks fell by 3.4 million barrels versus a
1.7-million-barrel decline forecast, indicating healthy demand
as summer driving season gets underway.
Investors are now awaiting data later in the day from the
Energy Information Administration (EIA) to get a clearer picture
on the country's demand outlook.
U.S. crude oil stocks have surged 43 million barrels since
mid-January and jumped 10 million barrels in the week to April
11, well beyond expectations. Stocks on the Gulf Coast that week
hit a record high due to a rise in imports and as domestic
output hit its highest in 26 years, EIA's previous data showed.
"On the supply side, the big story continues to be U.S.
tight oil," Nunan said. "Gasoline demand is rising, so that's
balancing things out a bit. But, overall oil markets are
Investors are also keeping an eye on Libya's progress in
ramping up exports. The North African nation's oil production is
currently around 220,000 barrels a day as several western
oilfields remain closed due to protests, a spokesman for
state-run National Oil Corp (NOC) said.
The El Sharara, El Feel fields and oil condensates
production at the Wafa field were still shut down. Libya's oil
production was 1.4 million bpd until July when a wave of
protests at oilfields and ports started across the North African
Additional support, particularly for the U.S. benchmark, is
also coming from U.S. housing data. While home resales fell to
their lowest level in more than 1-1/2 years in March, there were
signs a recent downward trend may be drawing to an end.
There was also an increase in supply and more first-time
buyers entered the market, adding to growing evidence of a broad
based recovery in the world's biggest economy.
(Editing by Tom Hogue)