SINGAPORE, Feb 19 (Reuters) - Brent crude held above $110 a barrel on Wednesday, underpinned by geopolitical concerns in Africa and Venezuela, while U.S. oil traded near a four-month high amid strong winter demand.
A frigid winter in North America has sapped heating oil supplies in the United States and buoyed prices. Weekly data due in the next two days should show a 1.8 million barrels drop in distillates stocks, according to a Reuters poll.
U.S. crude touched an intraday high of $103.14 a barrel, not far from $103.25 reached in the previous session - the loftiest since Oct. 10. The contract, which expires on Thursday, was at $102.75 a barrel, up 32 cents, by 0732 GMT.
Brent crude edged down 15 cents to $110.31, after settling on Tuesday at the highest level this year.
"WTI just exploded," said Tony Nunan, a risk manager at Mitsubishi Corp, referring to U.S. crude futures. "It's a combination of the unexpected severe winter and that drawdown at Cushing that caused us to go this high."
Crude inventories at Cushing, Oklahoma, the delivery point for West Texas Intermediate (WTI) contracts, have fallen by 1.4 million barrels since last Tuesday, traders said, citing a report from industry intelligence provider Genscape.
TransCanada's Gulf Coast pipeline is diverting crude from the U.S. Midwest to the Gulf Coast.
This has narrowed Brent's premium to WTI CL-LCO1=R by more than $6 from the start of the year to about $8 a barrel.
The spread is expected to stay volatile, Nunan said, as the market tries to strike a balance between extreme U.S. winter conditions which could last for another month, supporting oil prices, versus the start of seasonal refinery maintenance that could reduce crude demand.
The American Petroleum Institute's weekly petroleum stocks report will be delayed by one day to Wednesday at 4:30 p.m. EST (2130 GMT) while the Energy Information Administration's report will be released a day later at 11 a.m. EST.
GEOPOLITICAL RISKS IN AFRICA, VENEZUELA
The geopolitical risk premium in Brent rose as internal strife in South Sudan and Libya disrupted oil supply while protests in Venezuela raised concerns.
"Venezuelan production is way down from its peak and now with social unrest it cannot be good for production," Nunan said. "It's just another unstable OPEC producer which causes a geopolitical risk premium to be built into prices."
In Libya, oil output was down at 375,000 barrels per day (bpd) on Tuesday with protests continuing to affect a pipeline from the major El Sharara field, a National Oil Corporation spokesman said.
Libyan militias stepped up pressure on Tuesday, demanding that the country's parliament hand over power immediately.
South Sudanese rebels said they had seized control of the capital of oil-producing Upper Nile state on Tuesday, an assault that the government said breached a ceasefire and which casts doubt over planned peace talks.
Six world powers and Iran began "substantive" talks on Tuesday in pursuit of a final settlement on Tehran's contested nuclear programme in the coming months despite caveats from both sides that a breakthrough deal may prove impossible. (Editing by Richard Pullin and Himani Sarkar)
