* Analysts, officials expect high oil price volatility
* OPEC raises global oil demand growth forecast
* U.S. crude, gasoline, distillates stockpiles rose -poll
* Coming Up: U.S. API inventory report; 2030 GMT
(Updates throughout)
By Joe Brock
LONDON, May 11 (Reuters) - Oil rose above $77 a barrel on
Tuesday, reversing earlier losses, as uncertainty over the
outlook for European economies following a $1 trillion rescue
package provoked volatility across financial markets.
The dollar came off earlier highs against the euro, helping
to support oil. A weaker dollar makes oil cheaper for some
buyers holding alternative currencies.
U.S. crude for delivery in June <CLc1> rose 31 cents to
$77.11 a barrel at 1432 GMT, having earlier fallen to $75.36 as
equity markets slumped and the dollar climbed on doubts over the
future for euro zone economies.
ICE Brent for June <LCOc1> crude added 35 cents to $80.47.
"Oil has moved up as the U.S. dollar retreats a little
against the euro and commodity currencies, but U.S. equity
markets are down, and as long as they remain so, the rebound in
oil prices may be short-lived," said Harry Tchilinguirian, oil
analyst at BNP Paribas.
U.S. stock markets started lower on Tuesday but were
performing better-than-expected. []
An outlook for higher world oil demand from the Organization
of the Petroleum Exporting Countries (OPEC) on Tuesday offered
support to oil prices. []
In its monthly report, OPEC raised its 2010 world oil demand
growth forecast but said non-OPEC supplies would rise more than
previously expected this year, while compliance with its own
output targets slipped down to 51 percent.
VOLATILITY
On Monday oil prices rose as much as $3.40, before settling
up $1.69 at $76.80. Intra-day volatility was expected to
continue in coming days as the full implications of the euro
zone rescue package are gauged.
Spot gold, often seen as a safe-haven, remained near record
highs, highlighting the doubts many investors have over the
rescue plan.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^For a graphic on oil, equities and gold, click here:
http://graphics.thomsonreuters.com/gfx/JBO_20101105091337.jpg
For a commodity performance graphic, click here:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
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China's inflation edged up to an 18-month high in April and
bank lending topped expectations, pressuring oil prices on
concerns that potential monetary tightening measures could
result in lower demand for fuel in the world's second-largest
energy user. [] []
Attention in the oil market is set to turn to weekly U.S.
inventory statistics to be published over the next two days.
U.S. crude inventories likely rose by 1.6 million barrels
last week on higher imports and slightly lower refinery
utilisation, a preliminary Reuters poll of analysts showed on
Monday. []
Supplies of distillates including heating oil and diesel
probably added 1.2 million barrels, while gasoline stocks rose
700,000 barrels, the poll showed.
The industry group American Petroleum Institute will release
its inventory report for the week to May 7 on Tuesday at 2030
GMT and the U.S. Energy Information Administration's report is
scheduled for 1430 GMT, on Wednesday.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by William Hardy)
