RTRS:UPDATE 3-Brent oil steady above $106 as Russia supply worries ease
* Narrow scope of US, Europe sanctions eases disruption fear
* U.S. crude pressured by expectations of inventory build
* Coming up: U.S. inflation data at 1230 GMT (Updates throughout, changes dateline, previous SINGAPORE)
By Christopher Johnson
LONDON, March 18 (Reuters) - Brent crude steadied close to $106 a barrel on Tuesday, consolidating after losing more than $2 in the previous session as investors bet the Ukraine crisis would not interrupt Russian oil supplies.
The North Sea crude oil benchmark was up 20 cents at $106.44 per barrel by 1030 GMT, after dropping $2.33 on Monday. The May Brent contract hit $106.16 a barrel that day, the lowest level for a front month since Feb. 6.
U.S. crude climbed 15 cents to $98.23, after dropping 81 cents in the previous session.
"The market no longer believes the Crimean situation is an issue," said Carsten Fritsch, Commerzbank senior oil and commodities analyst in Frankfurt. "The crisis should ease."
Russian President Vladimir Putin, defying protests by Ukraine and Western sanctions, told parliament on Tuesday that Russia would move forward with procedures to annex Ukraine's Crimean region.
By pressing ahead with steps to dismember Ukraine against its will, Putin raised the stakes in the most serious East-West crisis since the end of the Cold War, a confrontation that markets worry could affect Russian energy exports to Europe.
Europe bought 4.33 million barrels per day (bpd) of Russian oil last year, or 44 percent of OECD Europe's net oil imports, according to the International Energy Agency.
But the United States and Europe have shown no signs yet of wanting to raise the stakes in their confrontation with Russia, and sanctions imposed on Monday targeted Russian and Crimea individuals, not broad trade.
So oil market attention has turned instead to ample global supplies and worries about a weakening demand outlook. Oil prices have also been dampened by estimates that U.S. commercial crude inventories rose last week by more than 2 million barrels.
U.S. crude inventories are expected to have risen by 2.8 million barrels on average, according to a preliminary Reuters poll taken ahead of weekly data reports set to be released on Tuesday and Wednesday.
With one eye on the Ukraine crisis, the European Union has begun discussing the need to reduce its reliance on Russian energy, British Foreign Secretary William Hague said on Monday.
Hague also said more names could be added to the sanctions list of 21 Russians and Ukrainians imposed by the EU, depending in part on how Russia reacted to Crimea's application to join Russia following a weekend referendum.
Oil prices found some support from worries about oil supply from the Middle East and North Africa.
Oil production in Libya is below 250,000 bpd following a new protest, according to the state-owned National Oil Corp.
"Supply issues should continue to support prices," Fritsch at Commerzbank said. "If geopolitical risks were to disappear, prices could go lower, perhaps to around $100 per barrel. But as long as there are still outages and supply disruptions, (this) looks a good level for Brent for the moment." (Additional reporting by Keith Wallis in Singapore; Editing by Dale Hudson)
