Oil holds at $69 ahead of expected US stock build

SINGAPORE, June 21 (Reuters) Oil prices edged up above on Wednesday as traders balanced ongoing geopolitical supply worries with the prospect of rising interest rates and larger fuel inventories in the United States.

U.S. light crude for August was up 16 cents at .50 a barrel by 0323 GMT, after the July contract expired down 4 cents at .94 on Tuesday. London August Brent crude was up 6 cents at .14.

Oil prices have come under pressure from the prospect of U.S.

interest rate hikes and moves in China to curb growth, which could dampen demand from the two largest oil consumers.

''There's a good chance we'll see money falling back in the energy market. June is historically one of the four weakest months of the year,'' said John Brady, broker at ABN AMRO in New York.

Fears of faltering demand could be backed up by weekly U.S.

government data due later on Wednesday, with analysts polled by Reuters expecting a 1.2 million barrel build in gasoline stocks last week for the eighth consecutive rise.

Higher fuel prices will cut back some consumption but world oil demand should still soar 37 percent by 2030, driven by transportation and non-industrialised countries in Asia, the U.S.

government's energy forecasting agency predicted on Tuesday.

Prices have slipped from a record .35 in April but have resisted a sharper fall in other commodities such as metals, which saw bearish economic data wipe as much as 25 percent off prices that had soared to all-time or multi-year highs.

EYES ON IRAN Support for prices has come from continuing tensions over Iran's nuclear ambitions, together with persisting unrest in Nigeria and Iraq.

U.S. President George W. Bush arrived in Europe on Tuesday to try to secure European support for sanctions if Iran refuses to suspend uranium enrichment.

A U.S.-backed package of incentives was offered to Iran early this month, and Iran, the fourth biggest oil exporter, has been given an unofficial mid-July deadline to reply to the offer.

World oil prices could triple if the diplomatic standoff over Iran's nuclear programme escalates into a military conflict, Saudi Arabia's ambassador to the United States warned on Tuesday.

However, the United States would be in ''good shape'' with enough emergency oil supplies if the dispute caused Tehran to cut its oil exports, U.S. Energy Secretary Sam Bodman said on Tuesday.

In Nigeria, armed men in a speed boat kidnapped two Filipino oil workers from its oil capital Port Harcourt on Tuesday, the latest in a string of kidnappings and attacks that have shut in some 500,000 barrels a day of oil since February.

Reuters SY GC1016