Brent slips as IMF cuts growth forecast

Brent crude futures slipped closer to $110, reversing from gains in the previous session after the International Monetary Fund warned that the United States and Europe could slip back into recession. Investors squared off positions ahead of the outcome of a US Federal Reserve policy meeting in which the bank is expected to announce further steps to stimulate the economy, measures that may impact the dollar.A surprise build in crude stocks in the world\'s top oil consumer added further pressure on the US benchmark.Brent crude slipped 3 cents to $110.51 a barrel at 0427 GMT, after settling $1.40 a barrel higher. US crude for November delivery fell 14 cents to $86.78. The contract for October, which expired at the close, settled $1.19 higher. \"It is very difficult to hold on to your positions given the uncertainty in the global economy,\" said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd. \"The market would like to know how the Fed plans to deal with the US economy.\" The Fed is expected to announce plans to intervene in the bond market to push long-term interest rates - already near historic lows - even lower in a move known as Operation Twist. The impending announcement kept commodities such as gold and Asian stock markets steady. The market will be watching Fed Chairman Ben Bernanke\'s comments even more closely after the IMF warned that the United States and Europe could slip back into recession next year unless they quickly tackle economic problems that could infect the rest of the world. The IMF\'s comments overshadowed a slight easing of worries over Europe\'s debt after Greece promised further cuts to its public sector before a second conference call with international lenders.\"Uncertainty over the rate of progress and possible direction of intergovernmental negotiations on debt restructuring continues to inject volatility into financial markets,\" analysts at JPMorgan said in a report. Brent turned neutral as it hovers around $110.42 per barrel, the neckline of a double-top pattern, while a rebound for US oil in the previous trading session has temporarily violated the development of a medium-term downtrend, Reuters technical analyst Wang Tao said. Data from the American Petroleum Institute showed an unexpected build in US crude oil inventories, compared with analyst expectations for a draw, in the week to Sept. 16. Gasoline and distillate stockpiles rose slightly.The market will now be watching out for the weekly report from the US Energy Information Administration, due out at 1430 GMT on Wednesday. Participants are also watching developments in the Middle East and North Africa to assess when Libya will be able to revive crude shipments. The African Union (AU) said it was recognising Libya\'s de fact ruling council. South Africa, the continent\'s pre-eminent economic power which has a major say in AU policy, also said it would recognise the provisional government, ending a long-standing relationship with ousted Muammar Gaddafi.Still, producers may intensify efforts to curb output if Brent falls towards $100 a barrel because many of the Middle East crude exporters may have to spend heavily on social programs for some time to prevent public upheaval, and this will require higher income from oil shipments, JPMorgan said. \"Ongoing strife in the Middle East reminds us that while the conflict in Libya is drawing to a close, the regional protests for government reform have not gone away,\" the report said.