* New Ukraine leader says no talks with "terrorists"
* Eastern Libya oil rebel rejects new government
* Iran: powers want "too much" in nuclear talks, hurdles surmountable
* Brent crude may retrace to $109.41 -technicals
By Manash Goswami
SINGAPORE, May 27 Brent crude rose towards $111 per barrel on Tuesday amid supply disruption worries as Ukraine launched air strikes to put down a separatist revolt and Libya struggled to rein in rebels.
Heightened geo-political risks have helped Brent gain more than 6 percent since hitting this year's low of $103.95 in early April. Investors are now awaiting a slew of economic indicators from the United States and Europe to gauge the demand outlook for oil and assess the benchmarks' price direction.
Brent crude gained 22 cents to $110.54 a barrel by 0352 GMT, less than $2 away from the high for the year of $112.39. U.S. oil was up 3 cents at $104.38.
"We may not have to wait too long before oil markets spring to life as traders await key data later tonight to get a sense of the appetite of the world's top consumer," said Ben Le Brun, market analyst with OptionsXpress.
"Right now the market is listless with very, very low volumes traded and supply side issues continuing to weigh on everybody's minds."
Latest durable goods orders, consumer confidence and Dallas Fed manufacturing index are some of the indicators due later in the day from the United States, and till the time those numbers are out trade in both the benchmarks will be capped 50 cents higher or lower from current levels, Le Brun said.
Geopolitical tensions, however, continued to underpin oil prices. Ukraine launched air strikes and a paratrooper assault against pro-Russian rebels who seized an airport on Monday, as its newly elected leader rejected any talks with "terrorists" and said a robust military campaign in the east should be able to put down a separatist revolt in "a matter of hours".
Ukraine is a main gas supply route to Europe from Russia.
In Libya, the leader of the protesters occupying the country's oil ports said he did not recognise Prime Minister Ahmed Maiteeq's new government and suggested a previously agreed deal to end his blockade could be in jeopardy.
Oil, particularly Brent, also drew support from demand growth hopes amid expectations the European Central Bank (ECB) is preparing a package of policy options to offer some stimulus for the euro zone economy.
Five people familiar with the measures being prepared detailed plans involving a potential rate cut, including the ECB's deposit rate going negative for the first time, along with targeted measures for small- and mid-sized firms measures.
"If policy measures are announced to help boost growth in the euro zone, that should have a positive impact on Brent prices and also spill over to support WTI," Le Brun said, referring to the U.S. benchmark.
Investors are watching progress of ongoing talks between Iran and world powers to find a solution to Tehran's controversial nuclear programme.
Iran said that world powers were "demanding too much" in negotiations aimed at reaching a deal by a July deadline, but hurdles could be overcome. Foreign Minister Mohammad Javad Zarif said a compromise was still possible despite the difficulties.
Brent faces resistance at $110.99 per barrel and may retrace to support at $109.41, while U.S. oil looks exhausted while approaching a resistance zone of $104.50-$104.99, according to Reuters technical analyst Wang Tao. (Editing by Himani Sarkar)