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UPDATE 7-Brent oil slips from 5-week high on supply increases

Jeanine Prezioso
Monday, 10 Feb 2014 | 11:29 AM ET

* Markets expect U.S. economic stimulus to continue

* U.S. oil hovers around $100/bbl, slips from session high

* UK Buzzard oilfield to undergo more maintenance in 2014

* Libyan oil production up to 600,000 bpd

(Rewrites throughout, adds analyst's quote, Libya details, changes byline/dateline, pvs LONDON)

NEW YORK, Feb 10 (Reuters) - Brent oil eased after hitting a five-week high on Monday pressured by increased supplies from Libya and the North Sea and as investors awaited direction from the new head of the U.S. Federal Reserve on the course of the central bank's monetary policy.

Fed chief Janet Yellen delivers her first testimony to Congress this week and markets expect her to indicate she will stay the course with tapering the Fed's bond buying program.

The Fed has been cutting its bond purchases by $10 billion a month as the U.S. economy has improved. The bond buying has largely supported commodity and equity markets.

"The overall sentiment is 'steady as she goes', said Tariq Zahir, managing member of commodity trading advisor Tyche Capital Advisors in New York. "I don't think there's going to be a taper of the taper."

Labor Department data on Friday showed a drop in the overall unemployment rate to a five-year low even as the number of jobs added were less than expected. Market analysts said the impact of exceptionally cold weather across the nation may have skewed the data.

The intense and relentless cold also propped up oil prices as demand for heating fuels skyrocketed and refiners pumped out distillates.

Temperatures in large cities were expected to moderate after this week, also weighing on prices. U.S. heating oil futures slipped 1.5 percent to $3.0044 per gallon.

March Brent crude was down 46 cents at $109.11 a barrel by 11:07 a.m. EST (1607 GMT), after reaching a session high of $109.75, its loftiest since Jan. 2.

The March contract expires at the end of trading on Thursday. Brent oil for April delivery was trading 50 cents lower at $108.35.

U.S. crude was up 21 cents at $100.09, after rising to $100.46, a 2014 high.

The spread between the two benchmarks widened earlier in the session to $10 for the first time in a week then narrowed to $9 per barrel <CL-LCO1=R>.

Output at Britain's Buzzard oilfield had returned to a normal rate of 200,000 barrels per day (bpd) or more, following its fourth outage of 2014 last week.

Buzzard, Britain's largest oilfield, will undergo a total nine weeks of maintenance in 2014, far more than the two weeks traders had expected.

Libya's current oil production is around 600,000 bpd with the El Sharara oilfield producing 327,000 bpd and national exports now at 450,000 bpd, a spokesman for the National Oil Corporation (NOC) said.

Saudi Arabia produced 9.767 million bpd of crude oil in January, down from 9.819 million bpd in December.

An easing of political tension over Iran's nuclear program could weigh on oil as supply from the OPEC producer may rise if Tehran reaches a final deal with world powers.

Iran has agreed to start addressing suspicions that it may have worked on designing an atomic weapon, the U.N. nuclear agency said on Sunday.

Iran and six world powers are due on Feb. 18 to start a final round of talks aimed at reaching a broader diplomatic settlement.

(Additional reporting by Christopher Johnson in London and Florence Tan in Singapore; Editing by Dale Hudson, Jane Baird and Marguerita Choy)