Oil Ticks Up Amid Sudan Violence


Brent crude rose towards $112 a barrel on Tuesday as conflict in South Sudan threatened its oil output at a time when production cuts in Libya are already curbing supply.

Traders also kept watch on a strike in France that has shut a third of the country's refinery capacity.

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Brent rose 27 cents to $111.83 a barrel by 1200 GMT, while WTI climbed 25 cents to $99.16. NYMEX trading will close an hour early on Tuesday.

South Sudan's production has fallen by 45,000 barrels per day (bpd) to 200,000 bpd after oilfields in Unity state shut down due to fighting.

"As the year comes to a close, the risk of an all out civil war that could stymie the country's production of around 250,000 barrels a day is growing," said a JBC Energy report.

The United Nations could nearly double the size of its peacekeeping force in South Sudan, while rebel leader Riek Machar and President Salva Kiir both indicated they were ready to try to end a deepening conflict that has killed hundreds of people.

The disruption to Sudanese oil supply adds to Libya's production cut of more than 1 million barrels per day as its key oil ports stay shut.

Despite the violence and tensions in Africa, oil price gains have been capped by a well-supplied market.

Brent is on track to close flat this year from 2012 amid a well supplied market and slower fuel demand growth in China, despite outages in Iraq, the North Sea and Libya.

West Texas Intermediate (WTI) crude is up 7.5 percent for the year, narrowing its gap with Brent which widened to almost $20 earlier this year, as more pipelines diverted oil away from the contract's delivery point in Cushing, Oklahoma, reducing a supply glut.

Traders will be scouring U.S. oil inventories data to gauge supply.

U.S. crude oil stockpiles likely fell for the fourth straight week last week, while gasoline inventories saw a preliminary rise, a Reuters poll of analysts showed on Monday.

The API will release its data on Tuesday at 4:30 p.m. EST (2130 GMT), while the EIA will publish its data on Dec. 27 at 11:00 a.m. EST due to the closure of the Federal Government on Wednesday for Christmas. (Additional reporting by Florence Tan and Manash Goswami in Singapore; editing by Keiron Henderson)