Crude holds above $97 as demand hopes counter stocks build

TOKYO: US crude futures edged up to stay above $97 a barrel on Thursday, paring a 0.5 percent decline a day earlier, helped by hopes for oil demand growth after a Reuters poll showed that the euro zone is slowly starting to emerge from recession.

FUNDAMENTALS

* NYMEX crude for March delivery was up 14 cents at $97.15 a barrel by 2354 GMT, after settling down 50 cents at $97.01 on Wednesday.

It rose as high as $98.11 on Wednesday, within striking distance of a 4-1/2 month high of $98.24 marked on Jan. 30.

But it was dragged lower after the US Energy Information Administration (EIA) data showed crude stocks rose by 560,000 barrels last week, though the gain was slightly less than expected by analysts.

* London Brent crude for new front-month April delivery had yet to be traded after settling up 13 cents at $117.88.

The March contract expired on Wednesday, settling up 6 cents at $118.72, supported by the Reuters poll showing that the euro zone is slowly starting to emerge from recession.

* The US EIA data also showed that US stockpiles of gasoline and distillates fell, according to its weekly report.

* The International Energy Agency (IEA) on Wednesday trimmed its world oil demand growth forecast for 2013 by 90,000 barrels per day, in contrast to the EIA and OPEC, which both raised their demand growth forecasts on Tuesday.

IEA also said Iranian oil output will likely fall further from its lowest in three decades as the West tightens sanctions on the Islamic Republic, depriving Tehran of hard currency revenues.

* Demand to move crude oil on the recently expanded US Seaway pipeline is so strong that shippers must now apply for space on the line by the 15th of the month, the operator said in a regulatory filing, 10 days earlier than most other US lines.

* Tesoro Corp reported the restart of the no. 3 hydrotreater unit on Feb. 11 at its 166,000-barrel-per-day San Francisco Bay-area refinery in Martinez, California, a filing showed on Wednesday.

MARKETS NEWS

* US stocks drifted in light volume on Wednesday, ending little changed, as investors remained cautious after the S&P 500 index briefly hit its highest intraday level since November 2007.

* The yen held near multi-year lows against the dollar and euro on Thursday, finding a bit of stability following a few sessions of volatile trade as the outcome of a Bank of Japan policy meeting loomed.