SINGAPORE: Brent futures eased on Tuesday on expectations US crude stockpiles rose for a second straight week, but held above $110 a barrel on concerns over supply following prolonged outages in Libya and other exporters.
An easing of the severe chill over the United States and Europe is likely to cut demand for heating fuels, removing a key support that has propped up oil benchmarks during a period of typically low demand. Investors are now eyeing appetite for gasoline ahead of the start of the US summer driving season.
Brent crude fell 17 cents to $110.47 a barrel by 0342 GMT, after settling at its highest for the year in the previous session. US oil declined 35 cents to $102.47, after ending 62 cents higher.
"After heating oil, the market will now look at gasoline demand and how that will help support oil prices," said Tetsu Emori, a commodity fund manager at Astmax Investment.
"There will be some refineries shutting down for maintenance, but it is hard to predict the direction of oil at this point."
Emori sees strong support for Brent at $105 a barrel and resistance at $115. The US benchmark faces strong support at $100 but could slip to $98, if it breaks past that floor.
As the market refocuses attention to gasoline, worries of further supply disruption following continued unrest in Libya, South Sudan, Nigeria and sanctions on Iran will keep oil prices supported, Emori said. "Oil will probably now be driven by fundamentals of the oil market itself," he said.
"People are looking at the demand/supply balance in the United States and other countries."
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