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UPDATE 4-Brent oil rises on US Fed stimulus policy, IEA outlook

Simon Falush
Thursday, 14 Nov 2013 | 6:44 AM ET

* Yellen says Fed has more work to do to help economy

* IEA says prices could rise in next few months

* Coming up: Yellen speech to Senate at 1500 GMT; EIA stockpile data at 1600 GMT

(Updates prices)

LONDON, Nov 14 (Reuters) - Brent oil rose towards $108 per barrel on Thursday on reassurance that the U.S. Federal Reserve will keep stimulus measures for now and a warning from the International Energy Agency (IEA) that prices are likely to rise.

U.S. crude fell, however, pressured by expectations of a rise in U.S. crude inventories.

Brent for December delivery was up 43 cents at $107.55 per barrel at 1123 GMT. The contract closed $1.31 higher on Wednesday, also supported by Libyan supply outages.

It is up 2.3 percent this week, on track for its biggest such gain since late August, after four weeks of losses.

U.S. crude was down 25 cents at $93.63 per barrel, after settling up by 84 cents on Wednesday.

In prepared comments to be delivered to a Senate committee hearing later on Thursday, Janet Yellen, who is to be the next head of the Fed, said she thought the U.S. central bank had more work to do to aid the economy.

"There were a few decent data points, so there was some concern that the Fed would soon announce the tapering soon, but the comments have pushed expectations of timing back," said Richard Mallinson, geo-political analyst at Energy Aspects.

He was referring to the timing of any reduction in the Fed's current $85 billion-a-month bond-buying programme.

Yellen is due to speak in a Senate hearing at 1500 GMT.

Oil markets look well supplied in the short term, but prices could rise in the next few months in response to political turmoil in Libya, security problems in Iraq and stronger consumption during the northern hemisphere winter, the IEA said.

"The recent easing of prices may be relatively short-lived," the West's energy agency said in a monthly report. "End-user demand is on the verge of a seasonal ramp-up, while refinery throughputs look set for a steep rebound in November and December."

Investors will also pay close attention to a weekly inventory report from the U.S. Energy Information Administration (EIA) due at 1600 GMT for clues about fuel demand in the world's biggest economy.

A Reuters survey showed EIA crude inventories are expected to rise by nearly 1 million barrels.

Data from industry group the American Petroleum Institute on Wednesday showed that U.S. crude stocks rose by 599,000 barrels overall last week, with an increase of 1.7 million barrels at the Cushing, Oklahoma delivery hub.

(Additional reporting by Jacob Gronholt-Pedrsen in SINGAPORE; editing by Jane Baird)