SINGAPORE May 13 Brent crude held above $108 a
barrel on Tuesday as the threat of further European sanctions
against Russia over Ukraine weighed on oil markets.
The European Union imposed sanctions on a top aide to
Russian President Vladimir Putin and the commander of Russian
paratroopers as well as two confiscated Crimean energy
companies, raising pressure on Moscow over its actions in
"On-going volatility in Ukraine has the potential to move
oil prices in either direction," said Vyanne Lai, oil analyst
with National Australia Bank.
Brent crude for June delivery rose 6 cents to
$108.47 a barrel by 0304 GMT, adding to gains in the previous
session when it closed 52 cents up at $108.41 a barrel.
U.S. crude slipped 4 cents to $100.55 per barrel
after climbing 60 cents to $100.59 a barrel in the previous
WTI futures were being supported by analyst expectations of
a further draw in crude oil inventories, as the U.S. nears the
start of its higher fuel demand summer driving season, ANZ
analysts said in a note.
But a Reuters poll of four analysts on Monday forecast U.S.
commercial crude oil stocks would remain unchanged at 397.6
million barrels in the week to May 9.
The survey was taken ahead of weekly inventory reports from
industry group, the American Petroleum Institute (API) and the
U.S. Department of Energy's Energy Information Administration
Investors had a sense of apprehension after weekend polls in
the eastern Ukraine regions of Donetsk and Luhansk showed most
voters were in favour of self-rule, NAB's Lai said.
Pro-Moscow rebel leaders in Donetsk called on Monday for it
to become part of Russia, although Moscow appeared to use the
referendum results to put pressure on the Ukraine government in
Kiev to hold talks with rebels in the two break away regions.
Saudi Arabia's oil minister pledged the world's biggest oil
exporter would boost supplies if there was any disruption caused
by the crisis in Ukraine.
Aside from the Ukraine crisis, "demand conditions for Brent
have been quite weak reflecting slowing in China," Lai said.
Libyan moves to increase output would also weigh on Brent.
China is due to release industrial production and retail
sales data on Tuesday, which analysts expect to weaken.
Libya said its western oilfields and pipelines, which have
been blocked by protests since March, would reopen on Monday
night, potentially raising Libyan crude output by 500,000
barrels per day (bpd).
"It's only got to be a matter of time before Libya increases
production," Lai said, adding that production has been running
at just 200,000 bpd while Libya has the capacity to produce up
to 4 million bpd.
(Reporting By Keith Wallis; Editing by Richard Pullin)