* Libya says reopening western oilfields, but output
* Pro-Moscow rebels in east Ukraine call to join Russia
* China's implied oil demand rose 1.1 pct in April
* Coming up: EIA inventory data out Wednesday 10:30 a.m. EDT
(Updates with API data)
By Elizabeth Dilts
NEW YORK, May 13 U.S. crude oil rose by more
than $1 a barrel to two-week highs on Tuesday as traders
expected weekly government inventory reports to show stockpiles
at the Cushing, Oklahoma, delivery point plunged to new record
lows last week.
Brent rose as well as strength in the U.S. crude and
gasoline markets outweighed the prospects for rebounding supply
Stocks of U.S. crude oil at Cushing dropped to their lowest
levels since 2008 in the week to May 2, and analysts said they
expect supplies were drawn down further last week as the United
States nears the start of its summer driving season when fuel
demand usually rises.
According to industry group the American Petroleum Institute
stocks at Cushing fell 590,000 barrels last week, while
nationwide commercial crude stocks rose 912,000 barrels.
The U.S. Energy Information Administration will release its
official report on Wednesday at 10:30 a.m. EDT (1430 GMT).
"We rallied because we are getting closer to minimal
operating levels at Cushing," said Carl Larry, CEO of
consultancy Oil Outlooks in Houston, Texas. "Demand for what is
coming out of Cushing is still strong."
U.S. crude settled $1.11 higher at $101.70 a barrel,
its highest settlement since April 29. Tuesday's settlement also
marked the first time in nearly three weeks that U.S. crude
settled above the 50-day moving average, a key technical level
the American benchmark has struggled to climb above.
Brent crude for June delivery also hit a two-week
high as it settled up 83 cents at $109.24 a barrel. The June
contract expires on Thursday.
Libya announced on Monday its western oilfields, which
protesters have blockaded since March, were ready to reopen,
potentially raising crude output by 500,000 barrels per day
(bpd). But on Tuesday, output was unchanged at
International data kept a lid on Brent's gains as the
Organization of the Petroleum Exporting Countries (OPEC) raised
its forecast demand for its crude oil in 2014 to 29.76 million
bpd, up 110,000 bpd from the previous estimate, but said its
current output was meeting global consumption.
In China, implied oil demand climbed by 1.1 percent in April
from a year earlier to 9.71 million bpd, according to a Reuters
calculation based on preliminary data but industrial production
and retail sales figures slipped.
In Ukraine, pro-Moscow rebels called for the eastern region
of Donetsk to become part of Russia, while Moscow appeared to
use the results of a disputed referendum to put pressure on Kiev
to hold talks with rebels in breakaway regions.
The European Union responded by putting sanctions on a top
aide to Russian President Vladimir Putin and the commander of
Russian paratroopers as well as on two confiscated Crimean
The world's biggest oil exporter Saudi Arabia pledged on
Monday that it would boost supplies if the crisis in Ukraine
caused any disruption.
The head of the International Energy Agency, the west's
energy watchdog, said it had no plans to release emergency crude
oil stocks due to the tensions with Russia.
"We only release stocks when there is a serious disruption
the market cannot solve," IEA head Maria van der Hoeven said on
the sidelines of a conference in Seoul.
(Additional reporting by David Sheppard and Charles Staples in
London, Keith Wallis in Singapore and Jane Chung in Seoul;
Editing by Keiron Henderson, Jane Baird and Marguerita Choy)