Oil trims gains to hover below $49 on profit-taking

                                
 * Crude stocks up 4.7 mln barrels,dwarf forecast -API
                                
 * U.S. housing market shows signs of recovery
                                
 * Eyes on U.S. EIA inventory data
                                
 By Fayen Wong
                                
 PERTH, March 18 (Reuters) - Oil trimmed gains and fell
below $49 a barrel on Wednesday, amid profit-taking after
bearish industry data showing large builds in U.S. crude stocks
eroded positive sentiment from better-than-expected U.S.
housing data.
                                
 Analysts said data from industry group the American
Petroleum Institute, which showed crude inventories rose much
more than expected last week, reflected poor demand at the
refineries and foreshadowed an equally poor set of numbers from
the U.S. Energy Information Administration due to be released
later in the day.
                                
 U.S. light crude for April delivery <CLc1> fell 29 cents to
$48.87 a barrel by 0222 GMT, erasing some of Tuesday's gains of
$1.81 that took the contract to settle at $49.16 -- the highest
settlement since Dec. 1, 2008.
                                
 London Brent crude <LCOc1> fell 24 cents to $48.00.
                                
 "The market is having a knee-jerk reaction to the poor API
data. There's probably also some profit-taking from yesterday's
rally," said Gerard Rigby, an analyst at Fuel First Consulting.
                                
 The American Petroleum Institute (API) said in its
inventory report late on Tuesday that domestic crude stocks
rose 4.7 million barrels last week to 349.9 million, dwarfing
forecasts for an increase of just 1 million barrels.
[ID:nN17597351]
                                
 The U.S. Energy Information Administration (EIA) will issue
its own stock data later on Wednesday, with crude oil
inventories seen up last week as refinery demand remained tepid
and imports increased a little, an expanded Reuters poll
showed. [ID:nN17307952]
                                
 Oil has tumbled $100 from a record high above $147 last
July as the global economic meltdown slashed demand for the
fuel worldwide.
                                
 But prices, which sank to levels below $35 a month ago,
have since stabilised in the $40-$50 range, as producer group
OPEC cuts output by 4.2 million barrels per day (bpd) and vowed
at its Sunday meeting to achieve higher compliance from members
to reduce production.
                                
 "Overall, I think we're seeing more funds flowing back into
commodities markets and there are now more efforts in trying to
push oil prices through $50 levels," Rigby said.
                                
 HOUSING DATA
                                
 Oil's gains on Tuesday were boosted by better-than-expected
U.S. housing data and inflation, which drove U.S. stocks higher
and lifted investors' risk appetite.
                                
 Government data showed U.S. housing starts and permits
rebounded in February from record lows, rising for the first
time in 10 months and offering a glimmer of hope for the
recession-hit economy. [ID:nN17421065]
                                
 Still, analysts are cautious about whether the housing data
marks a definite turnaround for the world economy and said the
market will keep a close eye on further data to gauge how the
U.S. economy was faring.
                                
 Data due to released later in the day include U.S. core
consumer price index for February as well as results of an
interest rate meeting held by the U.S. Federal Open Market
Committee.
  (Reporting by Fayen Wong; Editing by Clarence Fernandez)