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Brent steady above $110, investors await Bernanke's speech

Published 08/26/2011, 12:06 AM
Updated 08/26/2011, 12:08 AM
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* Oil prices head for a more than 2.5 pct weekly rise

* U.S. crude set to see weekly gain after losses in last 4 weeks

* Investors await Bernanke's speech

* Concerns over hurricane in the U.S. loom

By Seng Li Peng

SINGAPORE, Aug 26 (Reuters) - Brent crude was steady on Friday, while U.S. futures edged down as investors worried the Federal Reserve chief may not offer measures strong enough to help the U.S. economy, the world's top oil consumer.

Sentiment was, however, supported by worries about Hurricane Irene's impact on U.S. East Coast supplies at a time of ongoing, although somewhat easing, conflict in OPEC member Libya and sanctions against Syria.

Hurricane Irene, a major Category 3 storm, was forecast hitting the U.S. eastern seaboard by the weekend. Train services were cancelled and workers scrambled to protect power lines in Washington on Thursday as the storm threatened the U.S. capital.

Brent crude for October delivery was flat at $110.59 a barrel as of 0353 GMT. U.S. October crude shed 30 cents to $85, with the WTI-Brent spread above $25.00. Oil prices were headed for a more than 2.5 percent gain this week, with U.S. crude gaining after four straight weeks of losses.

"We saw a little bit more bullish data this week on the crude side which gave some support," said Jeremy Friesen, a commodity strategist at Societe Generale in Hong Kong, referring to the EIA data that showed a drop in U.S. crude stockpiles.

"But heading into today, the markets are going to focus a lot on the resolutions (from Bernanke's talk)."

According to Reuters market analyst for commodities and energy technicals Wang Tao, Brent oil faces a resistance at $111.60 a barrel and signals will be temporarily neutral before this resistance is cleared.

All eyes are on Bernanke's speech in Jackson Hole scheduled for 1400 GMT, with markets eager to hear what the Fed's plan is to help a struggling U.S. economy, although the growing consensus is that the Fed's options to stimulate the economy are limited.

At last year's meeting, Bernanke hinted at what eventually became a $600 billion quantitative easing bond-buying programme, known as QE2.

Economic worries on the other side of the Atlantic, however, continued to keep investors on the edge.

European consumers are cutting spending and feeling gloomier about the future as fears of a double-dip recession rise and stock markets wobble, while an industry survey showed British retail sales in August fell at their fastest pace in over a year.

German consumer sentiment fell slightly going into September, hitting a 10-month low as the euro zone debt crisis and fears of another recession in Europe and the United States weighed on consumer expectations, a survey showed.

LIBYA, SYRIA SUPPLIES

In Libya, rebels stormed Tripoli's Abu Salim district, one of the main holdouts of forces loyal to Muammar Gaddafi after a NATO airstrike on a building in the area, a Reuters correspondent said.

The Libyan rebel government hopes to restart oil exports within two to three months and reach full volumes in about a year, Ali Tarhouni, the official in charge of financial and oil matters told Reuters from Libya's oil ministry in Tripoli.

On Syrian supplies, some traders say it has become more difficult to sell the crude this month in the European spot market due to the U.S. sanctions on Syria and expectations EU sanctions may follow.

But oil major Royal Dutch Shell is planning to continue exporting Syrian oil in September despite fresh U.S. sanctions and a looming EU embargo. (Editing by Himani Sarkar)

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