UPDATE 4-Oil steadies near $105 after earlier drop

                                
  (Recasts, updates prices)
                                
 By Ikuko Kao
                                
 LONDON, April 3 (Reuters) - Oil steadied near $105 a barrel
on Thursday, reversing earlier losses, as the U.S. dollar
weakened on growing signs of economic slowdown in the United
States, the world's top consumer.
                                
 U.S. crude <CLc1> rose 20 cents to $105.03 a barrel by 1531
 GMT, while London Brent crude <LCOc1> was down by 35 cents to
$103.40.
                                
 The dollar surrendered earlier gains against some currencies
after U.S. data showed jobless claims the highest since 2005.
[ID:nN03441957]
                                
 Some investors are shifting money into oil and commodities
to hedge against the weak U.S. dollar, analysts say.
                                
 "It seems impact from the dollar strength is consistent,"
Mike Wittner, the head of Societe Generale's oil research said.
                                
 "We still see investors coming into the oil market."
                                
 Signs of U.S. economic slowdown can play as a bullish or
bearish factor for the oil market.
                                
 Earlier on Thursday, U.S. crude fell as low as $103.21 on
growing signs that economic slowdown is denting fuel demand in
the United States.
                                
 U.S. crude surged almost $4 on Wednesday as traders
initially focused on a sharp drawdown in U.S. refined oil
products, especially gasoline, rather than a large build in
crude stocks in the Energy Information Administration's weekly
data. [EIA/S]
                                
 Despite the fall in fuel inventories, average implied oil
demand in the United States over the first 13 weeks of the year
is down more than 479,000 barrels per day (bpd) compared to a
year ago, according to the data.
                                
 Some analysts said demand was expected to remain weak as
Federal Reserve Chairman Ben Bernanke on Wednesday conceded for
the first time that the U.S. economy may fall into recession in
the first half of 2008. [ID:nT97265]
                                
 "With the U.S. apparently sliding into a recession, oil
market rallies will probably not derive as much strength from
gasoline this year," Jan Stuart, economist with UBS, said in a
research note.
                                
 Some support for prices came from developments in Venezuela
and Nigeria.
                                
 Venezuela was preparing a "windfall" oil tax to boost its
revenues, only months after President Hugo Chavez's
nationalization crusade forced out two of the world's largest
energy companies, Exxon Mobil <XOM.N> and ConocoPhillips
<COP.N>. [ID:nL03710466]
                                
 In Nigeria, a fire at the country's major oil export
pipeline was still burning for a fifth day.
                                
 The operator, a Royal Dutch Shell venture, said output and
exports were unaffected.
                                
 Similar pipeline fires at Shell's pipeline last year led to
partial losses of supplies from Africa's largest oil exporter.
[ID:nL03907673]
  (Reporting by Chua Baizhen in Singapore and Ikuko Kao in
London, editing by Alex Lawler)