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Brent eases towards $109 on demand worries; supply fears support

* U.S. crude stocks rise overall, fell 1.1 mln barrels in Cushing

* U.S. gasoline stocks fell nearly three times than forecast

* Dollar holds near two-week highs, weighing on commodities

* Brent oil signals mixed - technicals

SINGAPORE, Feb 27 (Reuters) - Brent futures slipped towards $109 on Thursday on worries an easing of the severe chill in the United States will lower demand for heating fuels and remove a key support for oil, though supply-disruption concerns kept the losses in check.

U.S. crude oil was also under pressure as investors looked to book profits from its overnight gain.

A surge in the dollar and concerns over the consumption outlook of the world's second-biggest oil consumer China may also have weighed on oil prices. Crude also tracked most risk assets such as Asian shares and base metals lower.

Brent crude dropped 19 cents to $109.33 a barrel by 0526 GMT, after settling almost unchanged overnight. U.S. oil fell 26 cents to $102.33, after ending 76 cents up.

"As weather conditions improve going forward, we may see a decline in demand for heating oil and that will put some pressure on oil," said Chee Tat Tan, an investment analyst at Phillip Futures in Singapore.

"Overall, we see Brent being supported by continued geopolitical tensions in Libya, South Sudan and others."

Brent faces strong support at $105.20 and resistance at $113 a barrel till the end of next week, Phillip Futures' Tan said. He expects the U.S. benchmark trading between $98 and $103.80, with the price difference between the two contracts holding between $7-$10 a barrel.

The U.S. dollar held near two-week highs against a basket of major currencies, while Asian shares struggled to find a solid footing as escalating tensions sent investors scurrying from risk assets. A strong dollar weighs on commodities such as oil, which are priced in the currency.

Investors are watching the unfolding crisis in Ukraine. Russian President Vladimir Putin ordered drills by his armed forces to test combat readiness in western Russia, near the border with Ukraine, prompting Washington to warn a military intervention would be a grave mistake.

Oil markets are also watching the prolonged crisis in Libya, where oil output has slumped as the government struggles to control militias and improve law and order in the country.

OIL STOCKS

U.S. stocks of distillates rose 338,000 barrels to 113.1 million barrels, versus expectations of a 1.2-million-barrel draw, data from the Energy Information Administration (EIA) showed, indicating a decline in heating fuels demand.

But U.S. gasoline inventories fell much more than expected last week as mild weather coaxed more drivers back on the roads, while crude stockpiles rose only slightly, the data showed.

Gasoline stocks fell 2.8 million barrels, nearly three times more than the 1-million-barrel draw expected by a Reuters poll of analysts. Crude stocks rose 68,000 barrels, compared with expectations for a 1.2-million-barrel build. Imports in the Gulf Coast fell slightly as shipments were delayed by foggy weather.

(Editing by Muralikumar Anantharaman)