* U.S. crude inventories seen down last week, products build
* China cuts reserve requirement for some banks
* Iran says 6-month extension of nuclear talks may be necessary
* Libya arrives for OPEC meet with exports at a trickle
(Adds analyst's comments, updates prices)
SINGAPORE, June 10 (Reuters) - Brent futures rose above $110 a barrel on Tuesday, a day after posting their biggest daily percentage gain in nearly two months, on hopes of healthy demand growth from the United States and China - the world's top two oil consumers.
China's central bank cut the level of reserves banks that have sizeable loans to the farming sector and small- and medium-sized firms must hold, helping support the economy.
Oil also drew support from expectations of a drop in U.S. crude inventories, signaling healthy consumption as the summer driving season gets underway.
Brent crude added 14 cents to $110.13 a barrel by 0459 GMT, after settling up 1.30 percent, the most since April 14. U.S. oil increased 30 cents to $104.71. It ended 1.7 percent higher on Monday, its biggest daily gain since April 8.
"We are at a critical little juncture for oil markets with both benchmarks trying to push above key trendline resistance. People are getting confident about the global demand outlook," said Ric Spooner, chief market analyst at CMC Markets in Sydney.
"China's rate cut decision is another step towards supporting the domestic economy."
The U.S. benchmark is nearing a key resistance band of between $104.80 and $105.20 a barrel and a break past the top end of the range would signal investor expectations of a solid demand outlook, Spooner said. He pegged support at $100.
For Brent, the first resistance is at $111 a barrel with a floor at $108, he said.
The expected decline in U.S. crude stockpiles of 1.5 million barrels, according to a preliminary Reuters poll, comes days after a solid jobs data that showed employment returned to its pre-recession peak, adding to a recent string of positive indicators from the world's top economy.
"The on-market payroll print reinforced US economic stability and the demand backdrop for the world's largest oil consumer," analysts at ANZ said in a note. "Stronger seasonal demand should boost oil prices further, as inventories tighten."
The oil market is keeping an eye on the upcoming meet of producer group OPEC.
The Organization of the Petroleum Exporting Countries (OPEC), meeting in Vienna on Wednesday, expects its market share to come under pressure in the next few years as the U.S. shale oil boom and other competing sources boost rival supply, making it harder to accommodate rising Iraqi or Iranian output without a hefty cutback by Saudi Arabia and Gulf allies Kuwait and the United Arab Emirates.
The group is widely expected to keep its output quota unchanged at 30 million barrels per day (bpd) as long as prices hold around the current levels, which are not too strong nor very weak, Spooner said. Top exporter Saudi Arabia may step in to raise output if Brent rises past $120, "which would be considered too hot by the Saudis", Spooner said.
Investors are also watching the progress of talks between Iran and world powers in finding a solution to Tehran's disputed nuclear program. The talks on curbing the program in exchange for an end to sanctions could be extended for another six months if no deal is reached by a July 20 deadline, a senior Iranian official said.
(Editing by Himani Sarkar and Muralikumar Anantharaman)