* IEA warns sky-high prices could crimp growth
* Goldman told clients to take profit before markets reverse
* Technicals show retracements for both benchmarks []
* Coming up: API petroleum stocks; 2030 GMT
(Updates throughout, previous TOKYO)
LONDON, April 12 (Reuters) - Brent crude was firmer at
around $124.50 a barrel on Tuesday, edging up from a sharp fall
the previous day, as the International Energy Agency issued a
fresh warning that high fuel prices could erode demand.
ICE Brent crude for May <LCOc1> was down 28 cents up at
$124.26 at 0853 GMT, paring losses from a low of $121.97 after
hitting a 2-1/2 year peak of $127.02 a barrel on Monday.
U.S. crude for May delivery <CLc1> fell 30 cents to $109.60
a barrel. Earlier, prices dipped to $107.87 after having touched
a 2-1/2 year high on Monday at $113.46.
Mounting worries that strong crude oil prices are beginning
to dent oil demand growth were crystallised by a fresh warning
from the IEA, which said prices could ultimately self-regulate
through a global economic slow-down. []
Despite the warnings, analysts said Brent was finding
support after the agency kept its forecasts unchanged while
another said the benchmark should find technical support at
around $122 a barrel.
"The report is not as bad as expected in the sense that
while they talk about potential demand destruction, they have
not changed their numbers," Petromatrix analyst Olivier Jakob
said.
The warning from the agency, which advises industrialised
nations on energy policy, followed a note from long-term
commodity bull Goldman late on Monday advising clients to take
profit on chances that commodity prices may reverse.
[]
"There are real risks however that a sustained, $100 per
barrel plus price environment will prove incompatible with the
currently expected pace of economic recovery," the IEA said in
its monthly report.
"The IEA monthly report should prevent further strengthening
of the oil price," Commerzbank analyst Carsten Fritsch said.
Societe Generale also weighed into the demand destruction
debate, highlighting gasoline in the United States as the
likeliest first casualty.
"In the US, where low taxes on refined products for
end-users cause a rapid and direct pass-through of underlying
costs, the focus on increasing gasoline prices has been intense
in both the business and general media," the bank's analysts
wrote in a note. "This has driven mounting concerns in the oil
makets about "demand destruction" in the US".
Demand concerns also heightened in No. 3 oil consumer Japan,
where the evacuation zone around its damaged nuclear plant was
expanded because of high levels of accumulated radiation, as a
strong aftershock rattled the area. []
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Libya graphics http://link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
Reuters Insider-Doomsday Scenarios for Oil:
http://link.reuters.com/ner88r
For a graphic on speculator positions in U.S. crude:
http://link.reuters.com/wub98r
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Weekly oil inventory reports from industry group the
American Petroleum Institute (API) will offer a fresh snapshot
of U.S. demand and stockpiles at 2030 GMT.
Analysts surveyed on Monday expected crude stocks to have
risen last week, with distillate stocks dipping and gasoline
stocks dropping. []
The U.S. Commodity Futures Trading Commission said that as
of last Tuesday, hedge funds and other financial traders held a
total net-long positions in U.S. crude contracts equivalent to a
near record 267.5 million barrels. []
"This could be interpreted as an overbought level," ANZ's
analyst Serene Lim said. "If there is bearish sentiment in the
market, it may trigger a sell-off, and a cycle of long
liquidation."
(Additional reporting by Chikako Mogi and Risa Maeda in
Tokyo and Florence Tan in Singapore; editing by William Hardy)
