Brent Oil Back Below $100

Brent crude oil prices fell back below $100 per barrel on Tuesday in volatile trade, down for a fourth day and under pressure from strong supplies.

Prices were not far above a recent 16-month low as feared cuts to supply due to violence in the Middle East have failed to materialise. However, the potential for disruption to production in Iraq where a violent insurgency by Islamic State continues has helped prevent further weakness.

Brent also had support as Britain's North Sea Buzzard oilfield was shut down again on Monday night, according to trade sources, as it struggles to return from maintenance. Buzzard is the biggest contributor to the Forties crude stream, which helps underpin the price of benchmark dated Brent.

Brent was trading down 21 cents at $99.99 at 1339 GMT after ending the previous session 62 cents lower. On Monday, prices slid below $100 for the first time in more than 14 months and hit a low of $99.36 - the weakest since May 1, 2013.

Brent, which earlier fell as low as $99.57 on Tuesday, is down 11 percent so far this quarter, the biggest such drop since the second quarter of 2012.

However, possible threats to production in Iraq and Libya could lead to sharp gains at short notice, analysts said.

"It's a well supplied market," said Bjarne Schieldrop, an analyst at SEB in Oslo.

"But it's well supplied as a result of extreme risk, with Saudi Arabia keeping production at 10 million barrels per day, perhaps as a precaution in the event of problems in the south of Iraq," he said, referring to where the bulk of output is based.

U.S. crude was 43 cents higher at $93.09, snapping a three-day losing streak, after falling 63 cents on Monday.

Its relative strength is due to the fact it is less affected by demand weakness in Europe, and because of data out later on Tuesday and on Wednesday which is likely to show a fall in U.S. stockpiles, said Andrey Kryuchenkov, analyst at VTB Capital.

In addition hopes of a cut in output by the Organization of the Petroleum Exporting Countries has kept a floor under prices.

Gulf Arab oil ministers hold their annual meeting on Thursday in Kuwait that could include discussions about price levels.

Top OPEC exporter Saudi Arabia and other OPEC members can accept oil at $100 per barrel although some delegates see lower prices as short-lived.


U.S Crude Stocks  Eyed
The market is now waiting for U.S. crude inventory data for clues on the outlook for demand in the world's top oil consumer.

U.S. crude oil stocks likely fell by 1.5 million barrels in the week to Sept. 5, according to a preliminary Reuters analysts' survey on Monday.

The poll was released ahead of weekly inventory reports from industry group the American Petroleum Institute (API) on Tuesday and from the U.S. Department of Energy's Energy Information Administration (EIA) on Wednesday.

Investors were also eyeing developments in the Middle East.

Iraq's parliament approved a new government headed by Prime Minister Haider al-Abadi on Monday in a move to save Iraq from collapse and in what U.S. Secretary of State John Kerry said was a "major milestone".

Libya's oil output has risen to 740,000 barrels per day, the National Oil Corp said on Monday, a rise from 725,000 bpd fuelled by several oil export ports reopening.

Elsewhere, the European Union adopted new sanctions on Monday against Russia over Ukraine, but enforcement will be delayed for an assessment on whether a ceasefire in Ukraine is holding. The measures will target the ability of Russia's top oil producers to raise capital in Europe.

(By Simon Falush, Reporting by Simon Falush, editing by David Evans)