* OPEC production at all-time high -Barclays
* Coming up: U.S. weekly jobless claims; 1230 GMT
* U.S. crude stocks rise for fifth consecutive week -EIA
(Updates prices)
By Francis Kan
SINGAPORE, April 26 (Reuters) – Brent crude was steady
around $119 a barrel on Thursday, as optimism over a recovery in
the U.S economy offset easing concerns of a disruption in
Iranian oil exports and high U.S. crude stocks.
The U.S. Federal Reserve said on Wednesday it would support
growth in the world’s top oil consumer if necessary as it left
the door open for another round of monetary easing, raising
hopes of higher energy demand.
“The Fed’s comments are supporting crude oil prices, despite
a higher-than-expected U.S. inventory figure,” said Miguel
Audencial, a trader with CMC Markets in Sydney.
Brent crude slipped 11 cents to $119.01 a barrel by
0425 GMT after settling up 55 cents at $119.12 on Wednesday.
U.S. crude edged down 4 cents to $104.08. The
benchmark settled at $104.12, up 57 cents.
Asian shares followed Wall Street higher on the Fed’s
reassurance, giving a further boost to sentiment in the oil
markets.
OPEC PRODUCTION
The prospect of a loss of supplies from Iran has helped
drive oil markets higher this year, but evidence of rising
output from fellow OPEC producers has capped gains.
“While Iranian output has slipped … Iran’s gentle
downwards slope has been more than made up by increases
elsewhere,” said analysts at Barclays Capital in a report.
Total OPEC output is running at about 37.5 million barrels
per day, its highest level ever, the report said.
Iran is storing as much as 33 million barrels of crude on
tankers as it faces increasing difficulties in selling its oil.
Europe’s July 1 oil embargo and U.S. and European financial
sanctions prompted by Iran’s nuclear programme have seen
Tehran’s oil sales drop to most Western destinations and drawn
promises from some Asian buyers that they will cut purchases.
U.S. INVENTORIES, EURO ZONE WEIGHS
A large buildup in U.S crude inventories is also weighing on
prices, although a drawdown in refined fuel stocks provided some
relief, U.S. government data showed on Wednesday.
Crude stocks rose almost 4 million barrels in the week to
April 20, up for a fifth week in a row, the U.S. Energy
Information Administration (EIA) said. The average forecast in a
Reuters poll had called for a 2.7-million-barrel build.
U.S. gasoline stockpiles fell by a larger-than-expected 2.24
million barrels, a 10th consecutive week of decline.
Market participants will be looking to U.S unemployment
claims and pending home sales data later on Thursday to provide
further insight into the health of the world’s largest economy.
“Only a surprisingly negative figure will reduce the
market’s optimism caused by the updated Fed outlook. Although
don’t be surprised that concerns over Europe will once again
ruin the party,” said Audencial.
The prospect that euro zone economies would slip into a
recession due to the ongoing sovereign debt crisis have weighed
on markets for months.
There are growing expectations in financial markets that the
European Central Bank will have to ride to the rescue again with
Spain under intense pressure and the Dutch government having
collapsed over budget plans.
(Editing by Matt Driskill and Chris Gallagher)
