* Armed gunmen storm Libya's parliament on Sunday
* Libyan oil output falls to 200,000 bpd, from 300,000 bpd
* Obama, Hollande agree Russia to face further costs over
* Iran, Western powers make little progress in talks last
By Jacob Gronholt-Pedersen
SINGAPORE, May 19 Brent crude rose to $110 a
barrel on Monday on renewed concerns over Libya's oil output and
following some of the worst violence in Tripoli since the 2011
war against Muammar Gaddafi.
Heavily armed gunmen stormed Libya's parliament on Sunday
and demanded its suspension, claiming loyalty to a renegade army
general and deepening the chaos in the OPEC oil producer.
"This is the worst outbreak of militia-related violence for
a while and a reversal of the relatively positive sentiment that
we had from Libya earlier in the month," said Mark Keenan, who
heads commodities research in Asia at Societe Generale.
"It's very likely that Libya is going to retain a strong
geopolitical risk premium in oil markets going forward," Keenan
Brent July crude gained 23 cents to $109.98 a barrel
by 0358 GMT, after earlier touching an intraday high of $110.03.
Front-month Brent ended last week nearly 2 percent higher.
U.S. crude rose 17 cents a barrel to $102.19, after
settling 52 cents a barrel higher on Friday. The June WTI crude
contract expires on Tuesday.
In April, an end to a month-long blockade of key oil ports
in eastern Libya, raised the prospect of more Libyan crude
exports and weighed on global oil prices. But last week, just
opened oil fields were closed again and clashes erupted in the
east, with 43 people killed and more than 100 wounded in
The country's output fell to about 200,000 barrels per day
(bpd) from 300,000 bpd earlier last week, and it remains far
below the 1.4 million bpd produced last year.
The conflict in Ukraine provided further support as U.S.
President Barack Obama spoke with French President Francois
Hollande about the situation on Friday, the two agreeing that
Russia faces "significant" further costs if it continues
provocative and destabilising behaviour.
Russia, meantime, is ready to discuss a gas price discount
for Ukraine if Kiev pays off the more than $2.2 billion it owed
as of April 1, Energy Minister Alexander Novak said.
Russia has warned that it will not supply Ukraine with gas
in June unless Kiev pays in advance by June 2, raising fears
that deliveries to Europe could be affected.
A shortage of natural gas in Europe could prop up demand for
substitute fuels such as oil.
Iran and six world powers made little progress last week in
talks on ending their dispute over Tehran's nuclear programme,
U.S. and Iranian officials said. Their comments raised doubts
over the prospects for a breakthrough by July 20, which marks
the end of a temporary agreement that eases some sanctions
against the key oil producer.
Oil prices also found support from data showing U.S. housing
starts jumped in April and building permits hit their highest
level in nearly six years, indications that the world's top
economy is gaining traction.
(Editing by Tom Hogue)