* Libya conflict unresolved, Middle East still tense
* Coming Up: API U.S. weekly inventory report
(Updates prices, analyst comment, Yemen, Japan)
By Nia Williams
LONDON, March 22 (Reuters) - Oil prices eased on Tuesday,
with Brent hovering below $115 on an anticipated slowdown in
Western air strikes on Libya
Anti-aircraft fire rang out across Tripoli for a third night
on Monday, but U.S. President Barack Obama, wary of getting
sucked into a Libyan civil war, said the United States will cede
control of the air assault in days. []
Front month Brent crude <LCOc1> was 29 cents lower at
$114.67 at 1212 GMT, still within sight of a two and a half year
high near $120 hit last month.
U.S. crude for May <CLc2>, the most liquid contract before
the expiry of April later on Tuesday, shed 21 cents to $102.88.
Oil gained around 1 percent on Monday, the first trading day
after U.N.-backed western powers launched the military campaign
but Libyan rebels have so far done little to capitalise on their
advantage, fuelling speculation the conflict could grind to a
stalemate.
Edward Meir, senior commodities analyst at MF Global, said
much of the Libyan supply disruption had already been priced
into the market.
"Short-term, we suspect that the crude oil market is
somewhat overextended here, as the fighting in Libya will lose
its ability to spark the market higher," he said. "For all
practical purposes, investors have reconciled themselves with
the fact not much oil will be flowing out of Libya anytime
soon."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
More on Middle East unrest: [] []
US military leads on Libya but for how long? []
Libya Graphics http://link.reuters.com/neg68r
Technical analysis on Brent []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Violent political unrest has reached countries bordering
OPEC king-pin Saudi Arabia, the world's largest oil exporter and
only "swing state" with enough spare capacity to plug serious
production shortfalls elsewhere. [] []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Samuel Ciszuk, Senior Middle East & North Africa Energy
Analyst at IHS Energy, will hold a Q+A session in the Global Oil
Forum at 1500 GMT on Tuesday, looking at the rapidly evolving
situation in Yemen, Libya and Syria and assessing political and
economic risk across the region.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
JAPAN CRISIS
Prices have seesawed over the past week as concerns over
Western military intervention in Libya offset the risk aversion
that swept global financial markets after Japan's worst
earthquake on record, tsunami and resulting nuclear crisis.
Japan will allow the release of an additional 22 days worth
of crude oil from privately held reserves in a bid to ease
energy shortages the trade ministry said, after allowing the
release of 1.26 million kilolitres of reserves, or three days
worth of demand, last week. []
"This should bridge short-term supply gaps after the
earthquake disaster. Japan's oil demand should rise accordingly
when these stocks are replenished," Commerzbank analysts said in
a note.
Analysts expect weekly reports on U.S. oil inventories will
show gasoline and distillate stockpiles fell last week, which
should support product values. []
Industry group the American Petroleum Institute will publish
inventory statistics for the week ended March 18 on Tuesday,
followed by U.S. government data from the Energy Information
Administration on Wednesday.
(Additional reporting by Alejandro Barbajosa, editing by
William Hardy)
