* Brent trading sideways in 2009 on OPEC cuts
* Nikkei closes lowest in nearly four months
* U.S. crude inventories to rise for eighth week
(Updates prices, adds comment)
By Chris Baldwin
LONDON, Feb 18 (Reuters) - U.S. oil prices rose above $35 a
barrel on Wednesday, parring but not reversing Tuesday's nearly
7 percent drop on renewed economy concerns, slumping demand and
bloated inventories.
U.S. crude <CLc1> for March delivery rose 32 cents to $35.25
a barrel by 1430 GMT, while London Brent crude <LCOc1> for April
delivery was up 5 cents to $41.07 a barrel.
"The crude market is still hanging on to the low end of its
range," said Tom Bentz, an analyst at BNP Paribas Commodity
Futures Inc. in New York.
"The market is waiting for inventory reports over the next
couple of days and positioning ahead of Friday's March crude
expiration," Bentz said.
With the March WTI contract due to expire on Friday, the
April <CLc2> contract's premium narrowed to around $3.60 on
Wednesday versus nearly $8 last week <CL-1=R>, a sign traders
believe swollen inventories in Cushing, Oklahoma may persist.
Traders said Brent crude futures in 2009 are trading within
a $40-$50 a barrel range because OPEC supply cuts have helped
support the price in spite of slackening demand.
"Certainly it's continuing gloom for demand, but OPEC's
reining in its cut is holding Brent in a sideways range," said
Christopher Bellew, broker at Bache Commodities in London.
The Organization of the Petroleum Exporting Countries, a
supplier of more that a third of the world's oil, has struggled
to corral its member states into cutting up to 4.2 million bpd
since September to prop up prices.
Earlier this month the producer group said its members had
delayed 35 new projects due to low prices and the slowdown in
demand, and some OPEC countries have raised the prospect of
another supply cut at their next meeting in Vienna on March 15.
INCREASED VOLATILITY
The U.S Energy Information Administration will release its
weekly inventory data report on Thursday, but a Reuters poll of
analysts on Tuesday showed an average forecast for an increase
of 2.6 million barrels, nearing an 11-year high. []
U.S. auto makers unveiled new survival plans seeking
billions of dollars in extra government funds on Tuesday,
drawing sceptical responses and investor doubts about a return
to profitability. []
Analysts said the bailout request and Obama administration
plans to help homeowners would weigh on crude on Wednesday.
"We look for increased volatility in all markets during
Wednesday's session...of the two, the focus will be more on
Detroit," Edward Meir of MF Global wrote in a note.
The news across Asia has been almost uniformly bad, with
Japan, the world's second-largest economy, reeling from its
worst downturn in a generation. The Nikkei stock average <>
fell 1.5 percent to its lowest close in nearly four months. []
The financial crisis has left much of the world in recession
and hammered oil consumption, pulling crude prices from record
highs above $147 a barrel hit in July.
Traders will also watch for data on U.S. housing starts and
January industrial production, as well as the Redbook retail
sales index for February to look for new indications on the
health of the world's top economy.
(Additional reporting by Dharmasari Haroun and Chua Baizhen in
Singapore; editing by James Jukwey)
