Brent holds above $110 on hopes of delay in U.S. Fed tapering

Reuters

* Weak U.S. dollar boosts commodities

* U.S. oil demand higher in September -API

* Coming up: EIA oil data for the week ended Oct. 11

By Jessica Jaganathan

SINGAPORE, Oct 21 (Reuters) - Brent crude oil futures heldsteady above $110 a barrel on Monday on hopes the U.S. FederalReserve would delay curbing its massive economic stimulusprogramme until next year, which could help support oil demandin the world's largest oil consumer.

Investors were also waiting for the release of U.S.government oil data later in the day and U.S. September payrollsdata on Tuesday for further clues on the country's oil demand.

Brent crude futures for December delivery gained 10cents to $110.04 a barrel by 0343 GMT. Last week, the contractlost 1.2 percent, its first weekly loss in three.

U.S. crude oil futures for November delivery were up3 cents to $100.84, after earlier rising as high as $100.95.

"The market's just in a wait-and-see mode ... The thing onmost traders' minds is what sort of story is going to be told bythe U.S. data now that it's going to be released again," saidRic Spooner, chief market analyst at CMC Markets in Sydney.

Investors face a deluge of data this week as U.S. governmentdepartments catch up after a 16-day shutdown.

The U.S. Energy Information Administration will releaseweekly oil data for the week ended Oct. 11 later on Monday. Itsnormal release schedule will resume after that, and oil data forlast week will be released on Wednesday.

"We had the U.S. government shutdown after most of the datawe're about to see, so even if it looks okay, people will befactoring in the slowdown from the shutdown," Spooner said.

"If the data is weaker than expected then that would belooked at as significant as it gives us a lower base runninginto the government shutdown."

Oil prices were supported by a weaker U.S. dollar, whichfell to its lowest level since February on Friday on expectations the Fed will have to delay scaling back itsstimulus following the U.S. government shutdown.

A weak dollar boosts oil and other commodities priced in thegreenback by making them cheaper for holders of othercurrencies.

U.S. OIL DEMAND RISES

Oil prices were also supported after data showing that oildemand in the U.S. rose 2.7 percent in September compared withyear-ago levels due to the stronger economy and export demand,according to American Petroleum Institute data.

This follows positive economic data from China, the world'ssecond largest oil consumer, where gross domestic product grew7.8 percent in the third quarter from a year earlier.

Saudi Arabia increased its oil exports by 325,000 barrels aday (bpd) in August from July to 7.795 million bpd, the latestofficial data published by the Joint Data Initiative (JODI)showed on Sunday.

The world's largest oil exporter produced 10.19 million bpdof crude, up 156,000 bpd from July.

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