* Oil adds to 2 pct rally, stretching beyond $51 a barrel
* Economic optimism aided by Japan data; flu risk worsens
By Jonathan Leff
SINGAPORE, April 30 (Reuters) - Oil rose to more than $51 a
barrel on Thursday, extending the previous day's gains, as
traders focused on improving economic data and draining fuel
stocks rather than the worsening swine flu virus.
A surprise 4.7 million barrel decline in U.S. gasoline
stocks ahead of the driving season and stock market gains aided
oil's 2 percent rise on Wednesday, although prices remained
stuck in the $45-$55 range that has bound them for the past six
weeks.
U.S. light, sweet crude <CLc1> for June delivery rose 23
cents to $51.20 a barrel by 0230 GMT on Thursday. Brent crude
<LCOc1> gained 21 cents to $50.99.
Prices are on track to gain 3 percent this month, their
third monthly rise, but the rebound from February's $33 low has
stalled as traders await further evidence that the economy's
decline is easing, offering an improved outlook for oil demand.
"I think there's going to be a bit more of tracking broadly
sideways as the market tries to interpret the signals from the
economic data and whether we're at the trough in the economic
cycle," said Ben Westmore, commodities analyst at National
Australia Bank.
And while Wednesday's government data showed a surprise
decline in nationwide gasoline inventories that eliminated a
supply surplus heading into peak driving season, he noted that
crude stocks had continued to bulge. []
The Energy Information Administration weekly report also
showed a 4.1 million barrel increase in crude oil stockpiles,
bringing inventories to a new 19-year high, and a 1.8 million
barrel increase in unseasonally high distillate stocks.
News that the World Health Organization had raised its
threat level on the swine flu virus also failed to dampen the
mood as traders took a wait-and-see approach over whether it
would become a pandemic that could further cut fuel demand.
[]
"The market is waiting for a bit more clarification how bad
a problem it is," said Westmore.
ECON HOPES GROW
Oil gained on Wednesday after traders looked past the
surprisingly big 6.1 contraction in the economy in the first
quarter to focus on the details of a big run-down in
inventories.
U.S. stocks, an increasingly important mood indicator for
oil markets, climbed more than 2 percent, after hints of future
expansion were further reinforced by comments from the U.S.
Federal Reserve, which said the pace of deterioration in the
economy appeared to be slowing.[][]
Adding to the growing glimmers of economic hope, industrial
output in hard-hit Japan rose 1.6 percent in March, the first
gain in six months, contributing to a 4 percent gain in the
Nikkei average <>. []
A Reuters' poll forecast world oil demand would fall this
year by 1.56 million barrels per day, much more than previously
expected, as growth stalls in emerging powerhouses such as
China and consumption declines in the developed world.
[]
(Editing by Ben Tan)
