* Brent, U.S. crude stall ahead of Bernanke's speech
* Surprise drop in U.S. oil stocks offer support
* Nigerian force majeure on exports trims supply
* Worries about instability in Libya persist (Adds EIA data, updates prices)
By Jessica Donati
LONDON, Aug 24 (Reuters) - Oil prices edged up to $110 a barrel on Wednesday with support from disruptions to supply tempered by caution over demand and a key speech due from U.S. Federal Reserve Chairman Ben Bernanke on Friday.
Reduced crude U.S. stockpiles seen in data this week, a
still uncertain outlook for Libyan exports and a force majeure
declared on Tuesday by Royal Dutch Shell
"There is not a lot of impetus in either direction, with the market caught between problems with supply on one side - with Libyan exports offline and probably offline for some time - and weak economic growth and slowing demand," said Tobias Merath, Head of Private Banking Commodity Research at Credit Suisse.
Oil trading was likely to remain cautious at least until Bernanke's speech, which could help clarify the outlook for the U.S. economy and provide momentum, Merath added.
Bernanke is expected to express his disappointment over U.S. growth and offer remedial action to kick-start the world's largest economy and key oil consumer when he speaks to a central bank conference on Friday in Jackson Hole, Wyoming.
Brent crude
EIA SURPRISE
Energy Information Administration (EIA) data showed crude stocks fell a surprise 2.21 million barrels, against analyst forecasts for an 800,000-barrel rise. The report was in line with Tuesday's API data showing a 3.3 million barrel draw in the week to Aug. 19.
"The crude draw is a big number," said Carl Larry, director of energy derivatives and research at brokerage Blue Ocean in New York. "We continue to draw and those numbers might only even out as we head into turnarounds. Demand is still pretty solid from an overall perspective."
The outlook for Libya is still uncertain, where worries remain about internal divisions within the opposition in the post-Gaddafi era, potentially sparking a new period of instability and further hampering oil exports.
On Monday Libya's former top oil official Shokri Ghanem said it would take as long as 18 months for the country's oil flow to reach the pre-war level of around 1.6 million barrels per day (bpd), nearly 2 percent of global supply.
Supply from Africa took another hit on Tuesday with trade sources reporting the entire Bonny Light programme - around 190,000 barrels per day (bpd) in September and 216,000 bpd in October - had been withdrawn after a hacksaw attack on Tuesday.
"The force majeure in Nigeria is important, but not as important as it was last time as demand has fallen since and hence there should be room for the force majeure in the supply/demand balance," said Thorbjørn Bak Jensen, an oil market analyst at A/S Global Risk Management Ltd.
On the demand side, investors' hopes are pinned on the Federal Reserve to rescue the U.S. and euro zone economies from sliding back into recession.
German business sentiment added to gloom, dropping more than expected in August in a further sign European growth is slowing.
"Currently it is wait and see for Friday's Jackson Hole speech by Bernanke and the possible QE3 ahead," Jensen said. (Additional reporting by Seng Li Peng; editing by Jason Neely)