* Cushing crude stocks fall 1.5 mln barrels, U.S. total
gains - API
* Gasoline stocks fall 1.4 mln barrels, against forecast
* East Ukraine city calm after battle, rebels seek Russian
* Libya standoff emerges, Premier refuses to yield to
By Manash Goswami
SINGAPORE, May 29 Brent futures held near $110 a
barrel on Thursday on hopes of improved demand from the world's
top oil consumer, the United States, as a sharp fall in U.S.
gasoline stocks added to recent data pointing to a stronger
The brighter demand outlook is supporting prices, already at
elevated levels due to supply disruption concerns from Libya and
a widening rift between Russia, the world's top oil producer,
and the West over Ukraine. Still, investors see the market as
prone to a correction as some believe recent gains are overdone.
Brent crude traded 4 cents up at $109.85 a barrel by
0212 GMT, rising to as much as $110, after settling 21 cents
down. U.S. oil gained 16 cents to $102.88, after ending
down $1.39 as traders booked profits ahead of a government
report that is expected to show a build in overall crude stocks.
"Fundamentals haven't changed drastically, we know there are
still issues in Libya and Ukraine," said Ken Hasegawa, a
commodity sales manager at Newedge Japan. "Both crudes are
likely to fall because there have been lot of gains since the
early part of May."
The U.S. benchmark fell more sharply than Brent overnight
because it failed to break past key resistance at $105 a barrel,
Hasegawa said. The contract may now slide further to below $100,
he said. Similarly, the European benchmark may slip to $107.
Brent has recovered nearly 3 percent from an intraday low of
$106.85 touched on May 1, while the U.S. benchmark has gained
over 4 percent in the same period. That increase, without any
change to fundamentals, is making both contracts vulnerable to a
correction, he said.
Crude stocks in Cushing, Oklahoma, the delivery point for
the U.S. benchmark, fell by 1.5 million barrels, data from
industry group the American Petroleum Institute showed. That's
helping overshadow the overall rise in inventories by 3.5
million barrels in the week to May 23 to 383.9 million, compared
with analysts' expectations for an increase of 483,000 barrels.
In addition, gasoline stocks fell by 1.4 million barrels,
compared with analysts' expectations in a Reuters poll for a
Investors are now awaiting data from the Energy Information
Administration (EIA) due later today to gauge the demand outlook
in the United States.
Additional support is coming from the worsening crisis in
Libya. Libya's acting prime minister, Abdullah Al-Thinni,
refused to hand over power to a newly elected premier after
questioning his legitimacy in a deepening confrontation among
the OPEC nation's rival factions.
The North African state, struggling with unrest since a 2011
war ended Muammar Gaddafi's rule, now has two prime ministers
and a parliament deadlocked by splits among Islamist,
anti-Islamist and regional adversaries.
Investors are also watching the situation in Ukraine, where
relative calm returned to the streets of Donetsk after the
biggest battle of the pro-Russian separatist uprising in eastern
Ukraine. Pro-Moscow gunmen have declared the city of a million
people capital of an independent Donetsk People's Republic. On
Wednesday their leader Denis Pushilin appealed again for
(Reporting by Manash Goswami; Editing by Richard Pullin)