* Talk of higher OPEC output keeps lid on U.S. crude prices
* Brent-WTI spread spikes to more than $12 per barrel
* U.S. crude to fall below $83.50-technicals []
* Coming Up: First reading on U.S. Q4 GDP at 1330 GMT
(Updates throughout, previous SINGAPORE)
By Christopher Johnson
LONDON, Jan 28 (Reuters) - U.S. crude oil futures steadied
near two-month lows around $86 per barrel on Friday after talk
of OPEC raising output to cool prices, while robust demand in
Europe and Asia bolstered North Sea Brent.
The head of Kuwait Petroleum Corp said on Thursday OPEC
might need to boost output as high oil prices threatened the
global economy. []
Farouk al-Zanki, head of Kuwait Petroleum Corp, told Reuters
at the World Economic Forum in Davos, Switzerland, he was
concerned high oil prices might contribute to the start of
another global downturn as they did in 2008. Kuwait is the fifth
largest producer in OPEC. []
"The first signs are emerging that OPEC is responding, with
a thinly veiled call for an emergency OPEC meeting by a Kuwaiti
official and indications others are unilaterally raising
output," JPMorgan analysts led by Lawrence Eagles said.
OPEC's next meeting is scheduled for June.
U.S. crude oil for March delivery <CLc1> rose 20 cents to
$85.84 per barrel by 1110 GMT. It was on track for a second week
of losses, trading down more than 3.5 percent after dropping 2.8
percent last week.
WTI-BRENT
ICE Brent crude for March <LCOc1>, meanwhile, rose 60 cents
to $97.99 a barrel, stretching its premium over U.S. crude
futures <CL-LCO1=R> to more than $12 per barrel, its widest
since January 2009. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing the Brent-WTI spread, click:
http://link.reuters.com/ceg77r
For a technical analysis, click:
http://graphics.thomsonreuters.com/WT/20112801121947.jpg
For a graphic showing WTI contango, click:
http://link.reuters.com/deg77r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Near-record stocks in Cushing, Oklahoma, the delivery point
for WTI contracts, have caused prompt-month spreads to collapse
"and the market is now firmly in the supercontango zone,"
JPMorgan said in a Jan. 27 note.
In a contango market, the price of oil is progressively more
expensive in future months than the front month.
More Canadian crude is expected to flow into Cushing in
March through an extension of the Keystone pipeline even though
additional storage capacity is being added, JPMorgan said.
Reuters markets analyst Wang Tao said technical charts
showed Brent's premium to WTI crude will rise to $15.30-$17.63
per barrel over the next four weeks.
However, some analysts were sceptical the Brent-WTI premium
would stay high given that spikes have collapsed previously.
Financial markets awaited the first reading of U.S. economic
growth in the fourth quarter due to be released at 1330 GMT.
U.S. economic growth likely accelerated in the fourth
quarter of 2010, with consumer spending predicted to have
increased at its fastest pace in three years. []
The anticipated 3.5 percent annual growth rate would be the
quickest since the first quarter of last year.
(Additional reporting by Florence Tan in Singapore; editing by
James Jukwey )
