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UPDATE 2-Brent holds near $106, winter demand offsets weak US data

* Frigid winter boosts heating oil demand in US, Europe

* Libya PM threatens force to re-open eastern oil ports

* U.S. economy loses steam as manufacturing slows in January

(Adds OECD oil stockpiles, updates prices)

SINGAPORE, Feb 4 (Reuters) - Brent hovered at around $106 a barrel on Tuesday as a frigid winter boosted heating oil demand in Europe and the United States, offsetting weak U.S. and Chinese economic data.

Brent's losses were also limited by reduced crude supplies from Libya and the North Sea.

Bad weather reduced output from Libya while Prime Minister Ali Zeidan stepped up the pressure on protesters blocking eastern ports on Monday, telling them he had weeks ago ordered troops to prepare to move there to end their blockade.

March Brent crude edged down 13 cents to $105.91 a barrel by 0711 GMT after two straight sessions of losses. U.S. crude rose 18 cents to $96.61 a barrel following its largest daily percentage loss in nearly a month as it tumbled with U.S. equities.

"Oil fundamentals seem supported in the short term because OECD distillates inventories are low," Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo said.

Commercial oil stocks in the world's industralised nations plummeted in November by 53.6 million barrels, the biggest monthly decline since 2011, according to the International Energy Agency's latest monthly report. Preliminary data for December suggests a further 42.5 million barrel drawdown in OECD inventories.

U.S. distillate stocks, including heating oil and diesel fuel, were forecast to have fallen 2.2 million barrels on average last week, a preliminary Reuters poll of analysts showed. U.S. commercial crude oil and gasoline stockpiles were forecast to have risen last week.

The next support for West Texas Intermediate (WTI) crude is at $96 a barrel, Nunan said.

"The support for WTI is more constructive as they really had a cold winter," Nunan said, adding that two more snowstorms were forecast to hit the United States, while new pipeline capacity is reducing a supply glut at the contract's delivery point in Cushing, Oklahoma.

Oil is also gaining support from tighter supply in the North Sea as the Buzzard oilfield, the largest field that contributes to Forties, has had a new production glitch.

ECONOMIC WOES DRAG

Signs of slowing economic growth in the United States and China raised concerns about fuel demand from the world's largest oil consumers and forecasts of excess supply this year weighed on oil prices.

The U.S. economy has lost steam as manufacturing activity slowed sharply in January on the back of the biggest drop in new orders in 33 years, while construction spending barely rose in December, while factory activity reports have raised concerns about growth in China.

"The macroeconomic picture looks bad and that's why equities are weak. The so called risk-off trade is in vogue now," Nunan said, adding that the Federal Reserve's decision to further reduce its bond purchases has compounded problems at emerging economies.

(Reporting by Florence Tan; Editing by Michael Perry, Subhranshu Sahu and Simon Cameron-Moore)