* Brent/WTI spread widens to nearly $12 in heavy selling
* Fed tapering expectations pushed to 2014 after payrolls disappoint
* Coming up: EIA oil inventory data at 1430 GMT
By Jessica Jaganathan
SINGAPORE, Oct 23 (Reuters) - Brent crude edged lower under $110 a barrel on Wednesday, supported by a weak dollar as disappointing U.S. jobs data raised hopes the U.S. Federal Reserve would stick to its economic stimulus this year.
Any delay in cutting back on the Fed’s bond buying programme could stoke demand in the world’s largest oil consumer. U.S. crude was also knocked back by a build in stocks that widened the gap between the two major oil contracts.
The onset of seasonal U.S. refinery maintenance, coupled with pipeline outages, has swollen domestic stockpiles and stretched the Brent-WTI oil spread to its widest since April.
Brent crude oil futures slipped 15 cents to $109.82 a barrel by 0352 GMT, after earlier hitting a session-high of $110.06.
U.S. crude oil futures for December delivery slipped 38 cents to $97.92. The November futures, the previous front-month contract, which expired on Tuesday hit a low of $97.50, its weakest since July 1.
The Brent/WTI spread was holding close to $12, its biggest gap since mid-April.
“WTI prices are largely dictated by the amount of supply in the U.S. at the moment, which is why WTI really underperformed Brent overnight,” said Ben Le Brun, a market analyst at OptionsXpress in Sydney.
Traders are going to be looking now for further economic data to indicate what the Fed might do about its stimulus programme, he said.
“Markets have priced in a tapering story maybe pushed out into 2014 ... So now, we’re probably looking for economic data coming out in the next 24 hours to dictate prices.”
Data from the American Petroleum Institute showing crude stocks building at Cushing, Oklahoma, after 14 weeks of decline helped to trigger selling of U.S. crude.
Investors are waiting for the latest weekly report from the U.S. Energy Information Administration (EIA), which will return to its normal schedule this week after the U.S. government resumed operations after its shutdown.
U.S. crude prices were also under pressure with a rise in output from major shale oil plays, according to an EIA report.
Brent found support earlier in the session from the belated release of U.S. jobs data showing nonfarm payrolls increased by 148,000 workers in September, less than expected. While the employment gain in August was revised up, the July figure was revised down to be the weakest since June 2012.
The report suggested the economy was losing momentum even before the U.S. fiscal standoff that partially shut down the government for more than two weeks, lending credence to the central bank’s decision to hold off on reducing its stimulus.
The U.S. dollar wallowed near a two-year low against the euro on Wednesday, making oil and other commodities priced in the greenback cheaper for holders of other currencies.
Tenuous relations between the United States and Saudi Arabia, the most important oil producer in the Middle East, also supported a geopolitical risk premium in Brent.
Saudi Arabia’s intelligence chief is vowing that the kingdom will make a “major shift” in relations with the United States to protest perceived American inaction over Syria’s civil war as well as recent U.S. overtures to Iran, a source close to Saudi policy said on Tuesday.
Holding any Brent gains in check, Libya’s oil production is stable at around 600,000 barrels per day (bpd), where it has been for about a month, as the government works to end protests at fields and ports that have cut shipments for months, the National Oil Corp. (NOC) said.