* Oil pares previous losses, can't match other markets
* Supply in focus; stocks rise, Russia output at record
* Spreads flare, may augur correction
(Updates prices. previous SINGAPORE)
LONDON, Dec 3 (Reuters) - U.S. crude futures edged higher
Thursday after slipping 2.3 percent a day earlier on a
larger-than-expected build in U.S. crude inventories.
NYMEX crude for January delivery <CLc1> rose 72 cents to
$77.32 a barrel by 0837 GMT, after settling down $1.77 at $76.60
on Wednesday.
Brent crude <LCOc1> rose 87 cents to $78.75 per barrel,
trimming back from as high as $78.91.
Oil has traded in a $14-range this quarter, narrowing to $9
last month, bounded by a low of $72.39 when panic over Dubai's
debt situation sent commodities reeling for a few hours, and
$81.06 as the upper threshold.
Wednesday's losses, which stemmed a two-day advance, came
after U.S. government data showed crude stocks rose 2.1 million
barrels last week, topping the forecast for a 400,000 barrel
rise in a Reuters poll. []
"The fact that oil price volatility has swiftly returned to
very low levels tells us that the current range is very
sticky...and also suggests to us that the oil market now appears
less prone to being buffeted by macro-contagion fears," analysts
at Barclays Capital wrote in a research note.
Gasoline futures slumped on Wednesday as the data from the
U.S. Energy Information Administration showed gasoline stocks
increased much more than forecast. Distillate stocks fell 1.2
million barrels, against the forecast for a 300,000-barrel drop.
Adding to the concerns over rising supply, Russia set a
fourth consecutive monthly record for crude oil output in
November to retain its position as the world's largest producer.
[]
Traders said widening spreads between nearby prices and
those further in the future were also a cause for concern.
"The spread between the first and second months has blown
out...Something is up," a trader in Sydney said, adding that the
big sell-off late last year was also heralded by a flare in
spreads.
Front month crude traded $1.64 below the second month <CLc2>
contract, from around $0.50 in the middle of last month.
"At this time before expiry, the spread should be 30-40
cents. Someone is selling near-dated oil, I am guessing on
worries demand in the United States is falling of a cliff."
For a graphic showing oil prices and spreads, click:
http://graphics.thomsonreuters.com/129/CMD_OILSPRD1209.gif
(Additional reporting by Nick Trevethan in Singapore, editing
by Keiron Henderson)
((christopher.baldwin@reuters.com; +442075427526))
