UPDATE 10-Brent up on Egypt uncertainty, U.S. crude dips

                                
 * Egyptians continue protests, demand Mubarak resign
                                
 * U.S. crude stocks, imports fell last week -API
                                
 * China lifts interest rates for second time in six weeks
                                
 * Coming up: EIA oil data 10:30 a.m. EST Wednesday
 (Updates with API oil data, analyst comments)
                                
 By Robert Gibbons
                                
 NEW YORK, Feb 8 (Reuters) - Brent crude prices rose to near
$100 a barrel on Tuesday as Egypt's political turmoil kept
alive concerns about potential supply interruptions, while U.S.
crude prices edged lower after a volatile session.
                                
 Egyptians staged one of their biggest protests yet,
demanding President Hosni Mubarak step down now, their intent
undiminished by the vice president's announcement of a plan to
transfer power. [ID:nLDE7162B5]
                                
 Crude oil prices on both sides of the Atlantic bounced
after being pressured early when China moved to tame inflation
with an interest rate increase, the second in just over six
weeks, that revived concern about oil demand growth easing.
                                
 U.S. crude futures were lifted intraday on crude supply
disruptions in the United States and Colombia and as gasoline
futures rallied on refinery outages.
                                
 In London, ICE Brent crude for March <LCOc1> rose 67 cents
to settle at $99.92 a barrel, having reached $100.42.
                                
 U.S. crude oil for March delivery <CLc1> fell 54 cents to
settle at $86.94 a barrel.
                                
 Even with the price volatility, Brent's premium against
U.S. benchmark West Texas Intermediate crude hit a record high
above $13 a barrel, surpassing the previous record of $12.72
from Jan. 16, 2009, according to Reuters data.
                                
 "It doesn't look like the unrest in Egypt is going away any
time soon," said Mark Waggoner, president at Excel Futures Inc
in Bend, Oregon.
                                
 Strikes by workers at companies in the Suez Canal zone will
not affect the canal operations and movement of ships, a senior
canal official told Reuters, but the worker dissatisfaction
reinforced the remaining potential for the region's unrest to
cause oil supply disruptions. [ID:nWEB7527]
                                
 Saudi Arabia increased production in November and December,
according to a report from the U.S. Energy Information
Administration, which added to price volatility and helped cool
U.S. crude prices, analysts and brokers said. [ID:nWAT014866]
                                
 U.S. gasoline futures <RBc1> rose nearly 2 percent, getting
lift from news that Valero Energy Corp <VLO.N> shut down a
gasoline-making unit at its 287,000 barrels-per-day refinery in
Port Arthur, Texas. [ID:nWNAB0270]
                                
 "Although China's rate hikes appeared to set the stage for
a weak session early this morning, the product markets
recovered on reports of refinery issues," Jim Ritterbusch,
president at Ritterbusch & Associates in Galena, Illinois, said
in a note.
                                
 Gasoline futures rose, despite U.S. retail gasoline demand
slumping as a massive snowstorm curbed demand. [ID:nN0853756]
                                
 API REPORTS CRUDE STOCKS RISE
                                
 Domestic U.S. crude oil inventories rose 558,000 barrels
last week as imports fell 1.1 million barrels per day, the
industry group American Petroleum Institute said late on
Tuesday, against expectations stockpiles rose.
                                
 Gasoline stocks rose 3.2 million barrels, more than
forecast, and distillate stocks fell only 538,000 barrels, less
than expected, the API said.
                                
 Ahead of the API report, a Reuters survey of analysts
yielded a forecast for crude stocks to have risen for a fourth
consecutive week, by 2.4 million barrels. [ID:nN0847181]
                                
 Distillate stocks, including heating oil and diesel fuel,
were forecast to have fallen 1.2 million barrels and gasoline
stocks were expected to be up 2.5 million barrels.
                                
 U.S. crude pared losses after the API report's release.
                                
 The U.S. EIA's weekly inventory data is set for release at
10:30 a.m. EST (1530 GMT) on Wednesday.
                                
 CHINA INTEREST RATE HIKE
                                
 Crude oil prices on both sides of the Atlantic fell
intraday after China moved to tame inflation with an interest
rate increase, the second in just over six weeks.
                                
 Copper prices also slumped on the news before ending firmer
as investors decided Chinese demand for oil and industrial
metals would continue despite the efforts of the government to
cool stubborn inflation.
                                
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 BREAKINGVIEWS:
                                
 -- China tightens too little, too late   [ID:nLDE7171JZ]
                                
 Graphic
                                
 -- China rates and inflation http://r.reuters.com/bap87r
                                
 Market comments on rate rise             [ID:nLDE7170ZK]
                                
 Analysis on central bank's new clout     [ID:nTOE70J074]
                                
 FACTBOX-Who gains from Chinese inflation [ID:nTOE70Q02F]
                                
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 (Additional reporting by Gene Ramos and Matthew Robinson in
New York and Zaida Espana in London; Editing by David
Gregorio)