Brent Price Climbs on Libyan Uncertainty

Brent rose on Tuesday supported by instability in Libya while U.S. oil for June delivery edged higher as expectations for an increase in domestic stockpiles were outweighed by buying pressure on the contract's last day of trading.

The El Feel and El Shahara oilfields in western Libya were still shut more than a week after the government said protests there were over, an official said, and output was flat at 210,000 barrels a day.

Violence among rival militias and an attack on parliament by armed men claiming loyalty to retired Major General Khalifa Haftar on Sunday led the French oil major Total to cut its presence in Tripoli and Algerian state energy firm Sonatrach began evacuating workers.

The movement by Haftar may signal an attempt to draw up a broader anti-Islamist front that risks a wider battle in the North African state, which is trying to boost oil exports crucial to the economy.

U.S. commercial crude stockpiles likely surged to their highest in more than 20 years, a Reuters poll found.

Industry group the American Petroleum Institute will release its inventory report at 4:30 p.m. EDT (2030 GMT) and the U.S. government's Energy Information Administration report will come out Wednesday at 10:30 a.m. EDT (1430 GMT).

Brent crude was up 61 cents at $109.98 a barrel at 11:57 a.m. EDT (1557 GMT). U.S. crude for June delivery rose 16 cents at $102.77. The contract expires at settlement on Tuesday. U.S. crude for July delivery rose 22 cents at $102.33.

"The inventory report is a limiting factor for more upside in U.S. crude," said John Kilduff, an analyst at Partner Again Capital LLC. "But the Libyan story has had the most push and pull on the market. We're just not giving any sort of credence to any deal being struck."

"The oil infrastructure is very much intact and they could ramp up exports very quickly. It's just a question of what's the dynamic for finally getting the groups to coalesce behind one side or another. Everyone is watching the latest move by Haftar."

RECORD-HIGH U.S. STOCKS

A Reuters poll found U.S. commercial crude stocks were expected to have risen by 1 million barrels in the week to May 16 while gasoline stocks are seen flat and refinery runs up 0.5 percent.

That would take crude inventories to a record high after inventories hit 399.4 million barrels in the week to April 25, the highest since the EIA began collecting such data in 1982.

This weekend marks the start of the U.S. summer driving season with Monday's Memorial Day holiday.

Ukraine is set to hold presidential elections Sunday. A senior Russian official said the vote risks deepening divisions absent any "road map" to end the crisis.

(By Elizabeth Dilts, Additional reporting by Lin Noueihed in London and Jacob Gronholt-Pedersen in Singapore; Editing by David Evans, Jane Baird and James Dalgleish)