US oil prices held firm above $41 a barrel on Tuesday, with refinery problems in Europe and Asia and expectations of lower US stockpiles countering forecasts for steadier gasoline supplies. US light crude was flat at $41.44 a barrel, after losing 27 cents on profit taking on Monday.
Fears of supply disruptions in the Middle East and from financial problems at Russian Oil Company YUKOS kept prices bubbling near June's 21-year peak of $42.45.
Crude stocks in the United States are expected to have fallen 900,000 barrels in the week ended July 23 on increased refinery activity, analysts said in a Reuters survey. The previous week saw a slide of 3.6 million barrels.
Traders are more relaxed about gasoline supply as the summer peak-demand period gets into full gear after the government reported US stocks had risen 2.5 million barrels in the week ended July 16, widening the surplus over the year period to 5 million barrels.
Analysts expected the latest data from the Energy Information Agency, due on Wednesday, to show gasoline stocks fell just 150,000 barrels. Distillates are seen rising by 600,000 barrels.
The data comes as a string of refinery outages in Germany, the Netherlands, Turkey and Japan rekindles concerns over gasoline and heating oil supplies, giving speculative fund buyers a fresh incentive to raise their exposure to oil.
Germany's largest refinery, Micro, which was hit by a fire last week, said a 25 percent shortfall in gasoline production, would last for weeks.
Oil product supplies might also be crimped by the shutdown of a crude unit at a Total refinery in the Netherlands after a fire, though the unit was expected to resume operations in a few days.
A crude unit at Japan's biggest refiner, Nippon Oil Corp, was forced to close after a fire on Sunday, compounding the country's supply concerns as a heat wave spurs utilities' demand for oil just as Japan starts to stock up on kerosene for winter.
All eyes are on South Korea, where a strike at LG-Caltex Oil Corp entered its 10th day. Korea's second-largest refiner said it would restore 90 percent of operations on Tuesday as more striking workers returned.
It also increased oil products stocks to 15 days' worth from 12 days, still below the minimum 40 days Korean refiners are required by law to keep. "It (the market outlook) depends on how long the LG-Caltex strike would go on," said David Thurtell at Commonwealth Bank of Australia.
He said if US oil prices continued to hover above $40 a barrel, Opec would take action to balance the market by injecting more oil. "The problem is whether they (Opec) have spare capacity," he said.
Opec will implement a 500,000-barrel-per-day (bpd) increase to its official production limit from August 1. Latest independent estimates are that Opec, including Iraq, which has no quota, this month, will pump 30 million-bpd for the first time since 1979, leaving most cartel members, except Saudi Arabia, with little spare capacity.
Analysts said prices might have been capped by weekend reports that Saudi Oil Minister Ali al-Naimi thought Opec's current price band of $22 to 28 a barrel was valid.
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