GO
Loading...

UPDATE 3-Oil slips as U.S. warms up but Libyan outages support

* U.S. crude stocks likely rose 1.4 mln barrels last week - poll

* Distillate stocks seen down 1.5 mln barrels, gasoline down 1.5 mln

* Libya puts ministries under special budget rules after oil revenue slump

* Brent to rise to $111.17 - technicals

(Changes dateline, previous SINGAPORE, updates prices, adds quote)

LONDON, Feb 25 (Reuters) - Oil fell on Tuesday, weighed down by forecasts of rising U.S. crude inventories as icy weather eases, but persistent outages in Libya and other exporters underpinned global prices.

An easing of the severe chill over the United States is likely to cut heating-fuel demand, which has bolstered oil in recent weeks. But investors are also looking to an increase in appetite for gasoline ahead of the U.S. summer driving season.

Brent crude fell 42 cents to $110.17 a barrel by 0905 GMT, after settling at its highest for the year in the previous session. U.S. oil declined by 63 cents to $102.20, after ending 62 cents higher.

"We've seen Brent try to make a break to the downside recently, and a break to the upside yesterday but it is staying in the same range, anchored around $110," said Christopher Bellew, trader at Jefferies Bache.

"Geopolitically, Libya, Syria and South Sudan are all holding up the market, otherwise the very mild weather we have seen in northwest Europe would have had a bigger impact."

Libya has put some government departments under special spending rules as a slump in oil revenue has hampered the drafting of a budget for this year. Protests at oilfields and ports have knocked oil production down to 230,000 barrels per day (bpd) from 1.4 million bpd in summer.

Fighting in South Sudan has seen oil output fall by a third since December to about 170,000 bpd last week.

CRUDE INVENTORIES

U.S. commercial crude stocks were expected to have risen 1.4 million barrels on average for the week to Feb. 21, according to a Reuters poll taken ahead of weekly inventory reports from the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA).

That would mark a second straight week of builds as crude oil stocks rose about 1 million barrels to 362 million barrels in the week to Feb. 14, while crude imports fell 508,000 bpd to 7.36 million barrels per day.

Stocks of distillates, which include heating oil and diesel, were forecast to have fallen 1.5 million barrels on average last week, in the latest survey. Gasoline stocks were also seen down 1.5 million.

Investors are trying to assess whether an improving U.S. economy will boost gasoline sales enough to offset the fall in distillates consumption and help to bolster crude oil demand.

"Investors are worried about the repercussions on crude oil demand when winter fades," analysts at Phillip Futures said in a note. "On the other hand, upcoming summer maintenance in the United States and the North Sea refineries is likely to cause stockpiles to accumulate. This will weigh on crude oil prices."

(Additional reporting by Manash Goswami in Singapore; Editing by Dale Hudson)