* Prices to remain bearish -investment adviser
* U.S. crude inventories dropped by 1 million barrels
* Libyan oil production falls to 450,000 bpd -oil corp
By Keith Wallis
SINGAPORE, Aug 5 Brent held steady above $105 a
barrel on Tuesday despite ample crude supplies, supported by
political tension in the Middle East and North Africa and
expectations that data will show a further draw on U.S. crude
inventories last week.
But gains were checked as investors waited for economic data
from the United States and Europe later on Tuesday to give the
Brent crude <LCOc1) rose for the second straight session,
climbing 14 cents to $105.55 by 0354 GMT, after gaining 57 cents
on Monday. U.S. crude was up 12 cents at $98.41, after
rising 41 cents to settle at $98.29 a barrel.
"The market is relatively complacent - we're oversupplied
with oil. Traders are trying to work out the next driver," said
Jonathan Barratt, chief investment officer at Sydney-based
wealth management firm Ayers Alliance.
Investors were concerned about the situation in the Middle
East, North Africa and Ukraine, but supply disruptions are not a
big concern for the moment, Barratt said.
Brent closed at $104.84 a barrel in Friday, its lowest
settlement since April 2, while Brent for immediate delivery has
been at a discount to futures for the longest period since 2011.
This contango market structure indicates a well-supplied market.
"I would like to see expectations of economic growth
translate into demand but we haven't seen it yet because prices
are doing nothing," Barratt said.
A slew of data including U.S. factory orders, eurozone
retail sales and PMI figures will be released later on Tuesday.
"Investors are keeping a close eye on oil inventory levels
out of the U.S. as it's the summer drive time," Barratt said.
"I would think prices will continue to remain bearish."
A preliminary Reuters survey of analysts on Monday suggested
U.S. commercial crude oil inventories fell by about 1 million
barrels in the week to Aug. 1, while gasoline stocks remained
The survey was taken ahead of weekly inventory reports from
industry group the American Petroleum Institute (API) and the
U.S. Department of Energy's Energy Information Administration
Libya's oil output has fallen to around 450,000 barrels per
day from 500,000 bpd a week ago, although oilfields remain
secure, a spokesman for the National Oil Corp said on Monday,
without giving details.
Oil production has dropped from 1.4 million bpd a year ago
because of strikes by oil guards and violence between rival
factions in Tripoli and Benghazi that has damaged Tripoli's main
airport and sent foreign diplomats and workers fleeing abroad.
Oil exports from Iraq, OPEC's second-largest producer,
increased to an average of 2.442 million barrels per day (bpd)
in July from 2.423 million in June, the oil ministry said on
Monday, even though Islamic State insurgents tightened their
grip in the north.
Iraqi Prime Minister Nuri al-Maliki ordered his air force
for the first time to back Kurdish forces battling the Sunni
militants, state television reported on Monday.
Russia announced military exercises involving more than 100
jet fighters and bombers near the border with Ukraine on Monday
in a show of strength as the Ukrainian army recaptured more
territory from pro-Russian separatists in the east of the
(Reporting By Keith Wallis; Editing by Alan Raybould)