* Libya lifts force majeure on crude exports from Zueitina
* US impose more sanctions on Russia; Europe to follow
* US crude inventories to reach fresh high - poll
* Coming up: API weekly oil data; 2030 GMT
By Florence Tan
SINGAPORE, April 29 Brent crude held steady at
above $108 a barrel on Tuesday after posting its biggest daily
fall in nearly a month on an imminent rise in Libyan exports,
while investors shrugged off more U.S. sanctions on Russia.
Libya is lifting force majeure from the eastern Zueitina oil
port on Monday, state-run National Oil Corp (NOC) said, paving
the way to restart exports at a second port after a deal with
rebels to unblock major terminals.
June Brent crude gained 13 cents to $108.25 a barrel
by 0254 GMT after a 1.4 percent drop on Monday. U.S. crude for
June delivery edged up 3 cents to $100.87 a barrel after
settling up 24 cents in the previous session.
Investors were still cautious about Libya's output despite
news on Zueitina's restart, said Mark Keenan, who heads
commodities research in Asia at Societe Generale.
"The market has responded to it but until we see tankers
actually loading, rather than it just being ready to receive
tankers for loading, there still will be an element of caution
and risk premium in the Brent prices," he said.
Geopolitical risks stemming from the east-west conflict over
Ukraine also underpinned oil prices although analysts do not
expect sanctions to have a direct impact on Russian energy
"It's very unlikely that any formal sanctions will extend to
the crude oil or energy channels," Keenan said. "They rely too
much on each other if you take Russia and Europe together."
Financial markets largely shrugged off fresh U.S. sanctions
imposed on Russian firms and government officials on Monday,
while the international oil business played it down, with
traders and global companies forecasting "business as usual".
An escalation in tensions could strengthen Brent spreads in
the third quarter, especially with the September-December spread
currently low compared with previous years, Citibank analysts
said in an April 28 note.
In the United States, investors may be priming for a further
drop in crude stocks at Cushing, Oklahoma, which have touched a
five-year low as new pipeline capacity diverted oil from the
delivery point for West Texas Intermediate contracts to the Gulf
Coast, although the country's stockpiles are set to post a fresh
Brent's premium to WTI CL-LCO1=R narrowed by nearly $2 to
$7.28 on Tuesday.
"Now that crude can seamlessly move between PADD 2 and PADD
3, they really need to be looked at together as one region,"
Keenan said, referring to the U.S. Mid-West and Gulf Coast
areas. "Until that fully develops, the tightness of Cushing
inventories will maintain an element of support on the WTI
U.S. commercial crude stockpiles were forecast to have risen
1.9 million barrels last week, a preliminary Reuters poll of six
analysts showed. Crude inventories hit 397.7 million barrels the
previous week, the highest since records began over 30 years
(Reporting by Florence Tan; Editing by Richard Pullin)