* Dollar weaker against basket of currencies
* U.S. jobless claims rise, pace of home sales falls
* U.S. crude stocks highest in 19 years, refinery runs up
(Updates prices)
By Christopher Johnson and Alex Lawler
LONDON, April 23 (Reuters) - Oil rose above $49 a barrel on
Thursday, but pared an earlier gain, as a weak dollar outweighed
falling global demand and rising U.S. inventories.
The dollar weakened against a basket of other major
currencies. [] A falling dollar can boost the appeal of oil
and commodities to investors as an inflation hedge.
"Traders are looking more at exogenous factors, such as
equities, dollar direction and China as a precursor of what
might be on the horizon," said Nauman Barakat, senior vice
president, global energy futures at Macquarie Futures USA.
"The underlying fundamentals, while important, are not the
key drivers for market direction."
U.S. crude <CLc1> was up 58 cents at $49.43 a barrel by 1443
GMT, after dropping as much as 48 cents in early Asian trade.
London Brent crude <LCOc1> was up 24 cents to $50.05.
Wall Street turned lower after government reports showed the
number of U.S. workers filing new claims for jobless benefits
rose more than expected last week and the pace of sales of
existing homes fell in March.
MARKET TO STRENGTHEN?
The second quarter is traditionally the weakest of the year
for oil demand and many traders expect a strengthening in supply
and demand fundamentals towards the end of the year.
"Gasoline demand is going to increase, refining rates are
going to go up and I expect inventories will be tapering off,"
said Kevin Norrish, analyst at Barclays Capital, explaining why
some investors predict oil will strengthen.
Oil's fundamentals of supply, demand and inventories, at
least in the short and medium term, remained bearish.
Underlining falling oil demand, crude stockpiles in the
world's top energy consumer jumped to a fresh 19-year high last
week, the U.S. Energy Information Administration said, despite a
3 percentage point rise in refinery utilisation rates. []
The weak economy has slashed demand and pulled oil back from
its record high above $147 per barrel hit in July last year,
with expectations for growth continuing to be slashed.
The Royal Bank of Scotland (RBS) <RBS.L> said on Thursday it
cut its oil price forecasts for 2009 and 2010.
RBS now sees Britain's North Sea Brent crude averaging
$56.10 per barrel this year, down from a previous forecast of
$80 a barrel, but expects prices to recover to $75 in 2010,
compared with an earlier forecast of $76.25.
Brent prices <LCOc1> have averaged $46.87 so far this year.
(Additional reporting by Chua Baizhen in Singapore and Barbara
Lewis and Alex Lawler in London; editing by William Hardy)
