By Simon Falush
LONDON (Reuters) - Brent oil held above $110 a barrel on Wednesday, underpinned by geopolitical concerns in Africa and Venezuela while a fresh bout of freezing weather kept U.S. crude near a four-month high.
An unusually cold winter in North America has sapped heating oil supplies in the United States and buoyed prices. Weekly data due on Thursday 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, close to the $103.25 reached in the previous session - the highest since October 10. The contract, which expires on Thursday, was at $102.62 a barrel, up 19 cents, by 0926 GMT.
Brent crude edged fell back 36 cents to $110.10, after settling on Tuesday at the highest level this year.
"It's very cold on the east side of the U.S. and crude stocks are falling and the forecast still looks very cold for the next 6-10 day period," said Bjarne Schieldrop, analyst at SEB in Oslo.
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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 by more than $6 from the start of the year to about $8 a barrel.
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.
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Geopolitical factors push Brent oil to its highest close this year on Tuesday, as internal strife in South Sudan and Libya disrupted oil supply while protests in Venezuela raised concerns.
"Venezuela is for now only under street protests but those protests are starting to be large and we have to keep in mind that the riots, chaos and deaths in Ukraine also initially started with just street protests," said Olivier Jakob, analyst at Petromatrix. "The Venezuelan risk factor cannot be discounted."
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.
(Additional reporting by Florence Tan in Singapore; editing by Jason Neely)