UPDATE 8-Oil rises on technicals, Libya uncertainy, Mideast

                                
 * Gaddafi forces reverse some rebel advances
                                
 * U.S. crude inventories seen up, products down - poll
                                
 * Coming up: API oil inventory data, 4:30 p.m. EDT Tuesday
                                
(Recasts, updates prices and market activity)
                                
 By Robert Gibbons
                                
 NEW YORK, March 29 (Reuters) - Crude oil prices rose on
Tuesday in technical, thin trading and lifted by stronger
equities and lowered expectations about a quick return of
Libya's oil exporting capabilities.
                                
 Strong U.S. heating oil <HOc1> and gasoline <RBc1> futures
helped lift crude prices early as products were boosted by news
of a Sunoco <SUN.N> refinery restoring capacity after losing
power and expectations that weekly inventory reports will show
slumping U.S. products stockpiles. [ID:nN29258053] [EIA/S]
                                
 Expectations for a swift restoration of Libyan oil to the
market were reduced by successes of troops loyal to Muammar
Gaddafi's government in reversing rebel gains, adding lift to
oil prices. [ID:nLDE72S033]
                                
 Brent crude futures for May delivery <LCOc1> rose 36 cents
to settle at $115.16 a barrel, bouncing off its early $113.52
low.
                                
 U.S. May crude futures <CLc1> rose 81 cents to end at
$104.79 a barrel, snapping a string of three lower sessions.
                                
 Prices reached $105 after slumping to $102.70, where crude
found support just below the 20-day moving average of $102.87,
according to Reuters data.
                                
 Traders and brokers said U.S. crude had felt technical
pressure after Thursday's $106.69 intraday peak that failed to
reach the 2-1/2 year intraday high of $106.95 from March 7.
                                
 Recent low trading volumes have added to price volatility,
even as the uncertainty about threats to both supply and global
demand sent traders to the sideline, thinning volume.
                                
 Total U.S. crude trading volume was at just below 387,000
lots, 52 percent below the 30-day average. Brent trading volume
at just over 317,000 also was tracking below average.
                                
 "The Sunoco refinery news gave the market some lift and the
market may have been too optimistic on how fast Libya's oil can
return," said Phil Flynn, analyst at PFGBest Research in
Chicago.
                                
 MIDDLE EAST TURMOIL
                                
 Continued protests and unrest in Yemen, Syria and news of
Kuwait's death sentences for three people for being in an
alleged Iranian spy ring kept worries about the potential for
supply disruptions in the region in play. [ID:nLDE72S19S]
[ID:nLDE71O2CH]
  <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  More on Middle East unrest:       [nTOPMEAST]  [nLDE71O2CH]
  Libya Graphics               http://link.reuters.com/neg68r
  Interactive graphic          http://link.reuters.com/puk87r
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 U.S. stocks rose, also amid thin trading volume, erasing
initial declines, with investors moving into sectors that lost
ground after Japan's earthquake as first-quarter 2011 draws to
a close. [.N]
                                
 Technology and retail stocks were among the
better-performing sectors, despite news that U.S. consumer
confidence fell in March in the face of higher fuel prices and
that U.S. home prices fell in January. [ID:nLDE72S209]
                                
 Retail prices 26 percent above year-ago kept U.S. gasoline
demand flat last week versus the previous week and lower
compared with year ago, according to MasterCard Advisors.
[ID:nDZE7DS006]
                                
 Uncertainty about oil demand in Japan as the country
struggles to deal with its post-quake nuclear crisis remained a
factor helping to hem in oil prices. [ID:nL3E7ET0PZ]
                                
 "We have two factors that are countervailing," said Harry
Tchilinguirian, analyst at BNP Paribas.
                                
 "There is a risk premium in the Middle East built in on
risk of further contagion. On the other hand we have the fact
Japan is a major component of the global supply chain, so the
potential for a price correction in the second quarter
remains."
                                
 INVENTORY REPORTS
                                
 Oil investors will get the next snapshot of U.S. oil
inventories starting when industry group the American Petroleum
Institute releases weekly oil inventory data at 4:30 p.m. EDT
(2030 GMT) on Tuesday.
                                
 U.S. crude stockpiles were expected to have risen, with
both gasoline and distillate stocks falling last week,
according to a Reuters survey of analyst expectations. [EIA/S]
                                
 The API data will be followed by the U.S. Energy
Information Administration's inventory report at 10:30 a.m. EDT
(1430 GMT) on Wednesday.
 (Additional reporting by Nia Williams, Barbara Lewis, Florence
Tan, Alejandro Barbajosa and Randy Fabi; Editing by Marguerita
Choy)