RTRS:UPDATE 3-Brent holds near $111, set for biggest gain since Aug
* More than 40 killed in army depot blast in Libya
* Iran invites UN watchdog to visit nuclear-linked plant next mth (Updates prices, previous SINGAPORE)
Nov 29 (Reuters) - Brent crude firmed slightly on Friday and was set to post the biggest monthly gain since August as prolonged unrest in Libya kept supply disruptions in focus.
More than 40 people were killed in an explosion at an army depot in southern Libya after locals tried to steal ammunition, the latest in a series of clashes highlighting the government's inability to restore order.
But steady progress in settling the dispute over Iran's nuclear programme has kept gains in check.
Brent crude was up 13 cents at $110.99 a barrel by 1005 GMT. U.S. oil, was up 24 cents at $92.54. There was no settlement because of the Thanksgiving holiday in the United States.
Libya's oil exports are down to a fraction of capacity due to seizures of oilfields and ports by militias, tribesmen and civil servants demanding more political rights or higher pay.
"In Libya, ongoing turmoil in the east of the country underscores the difficulties facing the North African country in bringing barrels back to the market," said JBC Energy.
Overall, however, supplies are adequate partly because a surge in U.S. crude production is reducing the top oil consumer's reliance on imports.
U.S. crude oil output last week exceeded 8 million bpd for the first time since January 1989, according to the U.S. Energy Information Administration. That helped push up crude stocks by almost 3 million barrels to 391 million barrels, their highest for November since records began in 1982.
The continuous rise in stockpiles, even though refineries ramp up runs to meet winter demand, is weighing on the U.S. benchmark, WTI crude, just as Brent remains supported. That is widening the difference between the two to nearly $20 a barrel, just off highs touched in March.
Expectation that more Iranian oil will come back to the market if it follows through on its commitments may also weigh on oil. Iran and six world powers clinched a deal on Sunday to curb its nuclear programme in exchange for initial sanctions relief. (Additional reporting by Manash Goswami in Singapore; Editing by William Hardy)
