(updates throughout, previous SINGAPORE)
By Santosh Menon
LONDON, Feb 22 (Reuters) - Oil hovered above $98 a barrel on
Friday, down from this week's record high above $101 on rising
crude and gasoline stockpiles in top consumer the United States.
U.S. crude futures for April delivery <CLc1> was up 22 cents
at $98.45 a barrel by 1005 GMT, firmer after losses in
Thursday's volatile trade.
London Brent crude <LCOc1> rose 43 cents to $96.67 a barrel.
"There is an opportunity for a sell-down, particularly from
the rising U.S. crude stockpile. There is little to sustain
prices above $100," said Gerard Burg of National Australia Bank
in Sydney.
U.S. government data showed a sharp 4.2 million-barrel build
in crude stockpiles last week, the sixth straight week of gains
and nearly double analysts' forecasts. []
Despite lower refinery utilisation due to seasonal
maintenance and operational hiccups, gasoline stocks swelled 1.1
million barrels to a 14-year high of 230.3 million barrels.
"The market may not yet feel comfortable with holding above
$100 just yet, and unavoidably, the next batch of economic
indicators is going to weigh on sentiment," said Harry
Tchlinguirian at BNP Paribas.
Some analysts said the data showed U.S. consumers were
struggling with high pump prices and heightened fears of a
recession in the economy roiled by a credit crunch and a housing
slump.
But continuing demand strength in China and India is likely
to keep oil well supported through any slowdown in the west, as
are threats to supplies from Africa and the Middle East.
Fresh geopolitical concerns emerged on Friday after Turkey's
military said it had launched a cross-border land offensive
backed by fighter jets into northern Iraq to hunt down Kurdish
PKK guerrillas there. Northern Iraq is an oil producing region.
Turkish broadcaster NTV reported, without citing sources,
that 10,000 troops had entered Iraqi territory.
SLOWING ECONOMY
Prices surged earlier this week as investors and speculators
piled back into commodities as a hedge against inflation and as
financial markets stalled, but concerns about U.S. fuel demand
returned to the fore on Thursday.
Investment bank Merrill Lynch said the United States is in a
recession that could be much worse than it faced in 2001, and
closer to the sharper economic slump of the 1990s.
However, comments by OPEC ministers that the group could
hold or even reduce output at a March 5 meeting have helped oil
this week, taking it to near the inflation-adjusted high of
$102.53 hit in April 1980, a year after the Iranian revolution.
The International Energy Agency, which advises
industrialised countries on energy matters, has urged OPEC to at
least keep oil production unchanged to rebuild low crude stocks.
(Additional reporting by Felicia Loo in Singapore, editing by
James Jukwey)
