LONDON: Brent crude climbed towards $103 a barrel on Tuesday, rising for a second session, although persistent supply pressure and weak economic data in major consumer countries curbed gains.
The benchmark is set for a second straight monthly decline in August as slow growth in China and Europe has curbed oil demand and led to a supply glut in the Atlantic Basin, offsetting the impact on prices from world political tensions.
Brent crude rose 16 cents to $102.81 a barrel by 1024 GMT, after closing up 36 cents. U.S. crude, or West Texas Intermediate (WTI), gained 20 cents to $93.55 a barrel after settling down for the third straight session on Monday.
Investors have unwound a global political risk premium in Brent, discounting the possibility of supply disruption despite conflicts in Iraq, Libya and Ukraine.
Barclays analysts said in a note that oil output from OPEC countries most likely to face supply bottlenecks such as Iran, Libya, Iraq and Nigeria was instead picking up.
Disrupted supply from these countries totalled less than 400,000 barrels per day in July, down from 1.6 million bpd in September last year, they said.
"Brent crude has ticked up away from 14-month lows, deriving support from hawkish developments in both geopolitical crises in Ukraine and Libya, despite abundance in supply and forecasted waning demand on subdued economic data from Europe and the United States," said Dorian Lucas, an analyst at energy consultancy Inenco.
Libya's oil production has been increasing in the last few weeks despite a split between an Islamist faction in Tripoli and the newly elected parliament, following air strikes attributed to Egypt and the United Arab Emirates.
"Libya is still a key input for prices. As it stands in the spot market, if we seen more out of Es Sider that will put more pressure on prices," Olivier Jakob of Petromatrix Consultancy in Switzerland said.
Libya's ambassador to Egypt, Mohamed Jibril, called on Monday for foreign assistance to protect its institutions, airports and natural resources.
Adding to rising supplies Iraqi Kurdistan has already managed to deliver four large cargoes since May, despite Baghdad's efforts to block sales even as violence worsens in Iraq.
Brent's premium to U.S. crude hit the widest in more than two months on Monday following a pipeline oil flow switch that will send more crude to WTI's delivery point in Cushing, Oklahoma.
Investors will scour weekly U.S. oil inventory data due on Tuesday and Wednesday that could shed more light on supply and demand in the world's largest oil consumer.
U.S. commercial crude oil inventories are forecast to have increased 1.8 million barrels in the week to Aug. 22, while refined product stockpiles fell, a preliminary Reuters survey of four analysts showed on Monday.
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