PERTH, April 5 (Reuters) - U.S. crude oil futures slipped early Tuesday, but still hovered around the Monday's 2-1/2 year high as geopolitical risks amid fighting in Libya, unrest in Yemen and stalled elections in Nigeria continued to support prices.
U.S. government data last week showing the lowest unemployment rate in two years also bolstered oil demand expectations in the world's largest oil consumer, further supporting prices.
Weekly industry and government petroleum inventory reports are forecast to show a 1.4 million build in U.S. crude inventories, a 1.9 million barrel decline in gasoline stockpiles and a 200,000 barrel drop in distillates, according to a Reuters poll of analysts.
FUNDAMENTALS
* On the New York Mercantile Exchange, May crude was trading at $108.25 a barrel, down 22 cents, by 0114 GMT on Tuesday. On Monday, in New York, the contract closed at $108.47 a barrel, the highest close for front-month NYMEX crude since Sept. 22, 2008, when prices settled at $120.92.
* In London, ICE Brent crude for May delivery was trading at $120.92, down 14 cents. It closed at $121.06 a barrel on Monday, marking the highest settlement since Aug. 1, 2008, when front-month Brent crude closed at $124.18.
* Forces loyal to Libyan leader Muammar Gaddafi are staging a "massacre" in the besieged city of Misrata, evacuees said on Monday, as Libya said it was ready to discuss political reform, led by Gaddafi. [ID:nLDE73300N]
* Libyan rebels may this week sell the first tanker full of crude since a revolt against leader Muammar Gaddafi halted exports from the North African country. [ID:nLDE7331RP]
* The U.S. government is trying to ratchet up pressure on Yemeni President Ali Abdullah Saleh, who has partnered with the U.S. in efforts to combat Al Qaeda, to reach a deal with the opposition that would ultimately lead to his handing over power after 32 years, U.S. officials said on Monday. [ID:nLDE7331DG]
* The latest violence in Yemen, in which at least 15 were killed when police shot protesters in Taiz, south of the capital Sanaa, is "appalling," a U.S. State Department spokesman said. [ID:nN04169523]
* Saudi Arabia has not changed its view of the optimal oil price level and is still seeking $70 to $80 a barrel, a Saudi official told Reuters. [ID:nWNA5294]
* Kuwait would like to see world oil prices decline but does not expect them to fall below $90 a barrel, Farouk al-Zanki, state oil company Kuwait Petroleum Corp chief executive said. [ID:nLDE7330CV]
* Nigeria postponed parliamentary and presidential elections by one week after failing to get logistics prepared in time. [ID:nLDE7330ZK]
MARKETS NEWS
* Japan's Nikkei average opened up 0.14 percent at 9,732.26 on Tuesday, but was set to trade in a tight range for a third day, as the post-quake rebound looks to have run its course, with resource-related shares climbing on surging commodity prices.[ID:nL3E7F5009]
* The euro held below this week's five-month high against the dollar and 11-month peak versus the yen on Tuesday as investors paused to assess how much it can make in fresh gains given that expectations for interest rate rises have largely been priced in.
* The European Central Bank is expected to raise interest rates by a quarter point from a record low of 1 percent at its meeting on Thursday to rein in inflationary pressures, with two more 25 basis point hikes priced in by the year-end .
* Silver jumped to its highest since early 1980 on Tuesday on inflation concerns and a rise in ETF holdings to another record, while gold edged down as the euro held below this week's five-month high versus the dollar.
* Copper ended lower on Monday, failing to sustain an earlier rise as investors weighed the potential bullish impact of a big mining acquisition against a more subdued Chinese presence at the start of 2011.
UPCOMING DATA/EVENTS (GMT)
0758 EZ Markit Services PMI Mar 2011
1145 U.S. ICSC chain stores yy Weekly
1400 U.S. ISM N-Mfg PMI Mar
1400 U.S. ISM N-Mfg Bus Act Mar
2030 U.S. API petroleum stocks Weekly (Reporting by Rebekah Kebede in PERTH, Gene Ramos and Robert Gibbons in NEW YORK; Editing by Himani Sarkar)