* U.S. jobless claims fall to a 2-1/2-year low
* Brent slips as euro weakens against the dollar
* OPEC revises demand, supply outlook higher
* IEA raises oil demand growth forecast, supply outlook
(Updates throughout)
By Jessica Donati
LONDON, Feb 10 (Reuters) - U.S. oil was up slightly on
Thursday afternoon after a volatile day which saw it spike $1 on
strong U.S. jobs data and talk the Saudi King had died, only to
fade after reports Egypt's leader Hosni Mubarak would step down.
In London, Brent crude was down in choppy trade as the
dollar climbed and OPEC reported a boost in January output.
"A bit of the premium has come out of the oil markets...
Obviously, if it's a peaceful stepdown (by Mubarak) and anarchy
stops on the streets, it will completely ease fears that of any
remote possibility that the Suez Canal was ever going to be
disrupted," said Rob Montefusco, at Sucden Financial.
March ICE Brent <LCOc1> was down by 68 cents at $101.13 a
barrel at 1600 GMT having earlier risen by over $1 to $102.88 a
barrel on reports that the Saudi king might have died. Saudi
sources denied the reports []
U.S. crude for March <CLc1> was up 21 cents at $86.92 a
barrel after having risen earlier by $1 to as high as $87.77 a
barrel as U.S. jobless claims were reported at a 2-1/2-year low.
"There's a little bit of rumbling on Europe and the euro is
weakening and the dollar is strengthening... I'd say the
stronger dollar is the main factor," said Simon Wardell, an oil
analyst at Global Insight.
"The rumour about the Saudi King sent Brent higher and the
Brent/WTI spread blew out and after the denials Brent pulled
back. The concern was about a transition of power in Saudi
Arabia with all this uncertainty about Egypt and the region
going on," said Phil Flynn, analyst at PFGBest Research in
Chicago.
Media reported that Egypt's President of 30 years may step
down and the situation in the country would be clarified soon,
while the head of the U.S. CIA said there was a "strong
likelihood" Mubarak would go on Thursday. []
Higher OPEC production also weighed on prices after the
group's monthly report said its oil output rose to 29.72 million
bpd in January, the highest level since December 2008. []
But oil demand growth forecasts also rose, as both OPEC and
the International Energy Agency adjusted their outlooks for
consumption upwards.
OPEC revised global demand for OPEC crude up by around
400,000 bpd to 29.80 million bpd. The group warned that oil
prices would act to balance out demand.
"The down risk for the total world oil demand forecast lies
with international oil prices," OPEC said. "Should strong prices
remain, this will lead to a reduction in the use of
transportation fuels." []
And the IEA said oil demand will hit a record 90 million
barrels per day (bpd) by the fourth quarter of 2011 in its
monthly report. []
But the agency also added that rising OPEC production and
comfortable oil stocks in developed economies should limit a
further spike in oil prices.
"It's a robust report ... If you look at their communique
it's a very clear message that, yes, the market tightened quite
a bit in 2010," said Amrita Sen, an analyst at BarCap.
The Saudi king rumours helped push the premium for Brent
crude over U.S. West Texas Intermediate (WTI) <CL-LCO1=R> to a
fresh record on Thursday above $16 a barrel. A
greater-than-expected crude stockbuild in the United States
shown in data released the previous day hit the U.S. crude
price.
(Additional reporting by Seng Li Peng; editing by Keiron
Henderson)
