* Ukraine tensions ease slightly after presidential election
* Resistance levels on charts cap gains in Brent, WTI
(Adds byline, updates prices; changes dateline, previous
By Julia Payne and Nia Williams
CALGARY, May 26 Brent crude eased to near $110 a
barrel on Monday, down from last week's two-and-a-half month
high, as worries over Ukraine eased slightly following a
Resistance levels for Brent and U.S. crude, or West Texas
Intermediate (WTI), on technical charts were also keeping a lid
on gains. Market activity was limited with the U.S. and UK
markets were closed for holidays.
July Brent crude closed down 22 cents at $110.32 a
barrel after hitting a two-and-a-half month high at $111.04 on
U.S. crude futures for July delivery were down 17
cents at $104.18 a barrel, after settling on Friday at their
highest since April 21.
"You had the Ukraine elections, and Russia said it will
respect it ... so there is no escalation," said Olivier Jakob at
the Petromatrix consultancy in Zug, Switzerland.
Last week, fighting in Ukraine as well as production cuts in
Libya and South Sudan had helped drive up Brent, but tensions
eased after Russia said it would respect Ukraine's election
On Sunday, a decisive win for billionaire Petro Poroshenko
in Ukraine's presidential election raised hopes of political
stability in Ukraine - a main gas supply route to Europe from
Russia said on Monday it was ready for dialogue with
Poroshenko, but warned authorities in Kiev not to step up armed
operations against separatists in the east.
Also keeping pressure on oil prices, Statoil said
on Friday it had resumed some production at the Snorre B
platform in the North Sea.
Money managers raised their net long U.S. crude futures and
options positions in the week to May 20, the U.S. Commodity
Futures Trading Commission said, ahead of peak summer demand.
The Memorial Day holiday usually marks the start of the U.S.
Speculators also raised net long positions in Brent by
25,661 contracts to 200,876 in the week, ICE data showed. They
raised net long positions in gasoil by 7,386 contracts to 68,479
in the week.
Growth in oil supply is expected to exceed demand this year,
spurring softer prices in the second quarter before rebounding
in the second half of the year on seasonally stronger
consumption, Morgan Stanley analysts said in a research note.
Barring new supply outages, global oil capacity will rise by
1.8 million barrels per day (bpd) this year, the fastest growth
in a decade, the bank said, while product demand will grow by
1.1 million bpd.
LIBYA, IRAQ TENSIONS
Libya's El Sharara and El Feel oilfields remained shut, a
spokesman for state-run National Oil Corp said on Sunday, almost
two weeks after the government said protests at the western
fields had ended.
OPEC production is likely to decline this year, despite an
addition of 400,000 bpd of new capacity led by Iraq and Saudi
Arabia, Morgan Stanley analysts said.
"Disruptions in Libya are likely to persist, and we see
little hope for a material increase in Iranian oil exports
during 2014," they said.
Sudan has offered to supply materials, engineers and
electricity to South Sudan to speed up the repair of oilfields
damaged during a five-month rebellion that has slashed output by
a third, South Sudan's oil minister said on Saturday.
(Additional reporting by Florence Tan in Singapore; editing by
G Crosse and Jane Baird)