UPDATE 1-Oil back above $100, eyes on economy

                                
 (Recasts lead, updates prices)
                                
 By Chua Baizhen
                                
 SINGAPORE, Feb 21 (Reuters) - Oil climbed back above $100
on  on Thursday, about a dollar off record-highs, on hedge fund
inflows and OPEC supply concerns, with traders weighing U.S.
economic worries against hopes of more Fed cuts.
                                
 The new front-month U.S. crude for April delivery <CLc1>
rose 48 cents to $100.18 by 0738 GMT. The March contract, which
expired a day ago, rose for five-straight sessions to hit a
record of $101.32 on Wednesday, before closing at $100.74 a
barrel, the highest settlement ever.
                                
 "It's almost become self-perpetuating. People are buying
because people are buying," said Jim Ritterbusch, president of
Ritterbusch & Associates in Galena, Illinois.
                                
 Crude oil prices are now hovering near the all-time
inflation adjusted high of $101.70 hit in April 1980, a year
after the Iranian revolution, the International Energy Agency
said.
                                
 London Brent <LCOc1> rose 50 cents to $98.92 a barrel.
                                
 Analysts said funds were rushing into oil and other
commodities such as gold as a hedge against inflation, drawing
in momentum trades and exacerbating price pressures.
                                
 U.S. oil inventory data due later in the day are likely to
show crude oil stocks rose by 2.3 million barrels last week,
the sixth build in a row, a Reuters poll found. [EIA/S]
                                
 Unusually high gasoline stocks were expected to rise by 1.1
million barrels, while distillates should fall by 1.7 million
barrels after a spell of cold weather. The oil inventory report
is due at 1530 GMT, delayed a day due to Monday's Presidents'
Day holiday.
                                
 While U.S. economic data painted a gloomy picture for oil
demand in the world's biggest consumer, investors appeared more
focused on worsening inflation.
                                
 The U.S. Consumer Price Index rose faster than expected in
January and for the second straight month. [ID:nN20341810]
                                
 And the U.S. central bank lowered its 2008 economic growth
forecast, raising fears the world's biggest economy is heading
into stagflation -- when growth slows and inflationary
pressures persist -- but lifting hopes the Federal Reserves
would cut rates further to revive the economy. [ID:nN20606892]
                                
 "That's another reason why oil's been so strong. Markets
have been pricing in another interest rate cut. This will
weaken the dollar and is bullish for U.S.-dollar denominated
commodities," Ritterbusch said.
                                
 A host of supply risks also lent support to prices,
including U.S. refinery problems, the row between Venezuela and
Exxon Mobil <XOM.N> and expectations that the Organization of
the Petroleum Exporting Countries will hold output levels
steady or even reduce them when they meet next month.
                                
 The International Energy Agency wants OPEC to keep oil
production levels unchanged, at the very least, to rebuild low
crude stocks, an agency analyst said on Wednesday.
[ID:nL20523114]
                                
 Several members including Iran have said high prices are
due to speculation, not fundamentals, and they see no need for
OPEC action given healthy inventories, but Iraq's oil minister
said the cartel is ready to take any measures, including a
review of output, to stabilise the market in the wake of record
prices.
 (Editing by Ramthan Hussain)