(Updates prices, adds China imports)
By Felicia Loo
SINGAPORE, April 11 (Reuters) - Oil held around $110 a
barrel on Friday, as a rebound in the dollar against the euro
and Saudi Arabia's comment that markets were well supplied led
investors to reduce positions, but firm Chinese demand lent
support.
U.S. light crude for May delivery <CLc1>, which has gained
14 percent so far this year, fell to as low as $109.49 a
barrel, steadying at $110.10 by 0709 GMT, down a cent.
London Brent crude <LCOc1> gained 25 cents to $108.45 a
barrel.
The market hit a record high of $112.21 a barrel on
Wednesday, after government data showed a surprise drop in
crude oil and fuel supplies. [].
"It is a continuation of the price volatility and there is
a lack of initiative on OPEC to bring on more oil," said Gerard
Burg, a resource analyst from National Bank of Australia.
The price decline came after the dollar surged from record
lows against the euro as European Central Bank President
Jean-Claude Trichet expressed concerns over high inflation,
sluggish growth and foreign exchange volatility.
The recent weakness in the U.S. currency has prompted funds
to buy dollar-denominated commodities, pushing up prices of
crude oil, gold, metals and grains. []
But worries over oil demand in top user the United States
undermined prices, as fresh signs of a fast-weakening economy
more than offset concerns about falling U.S. inventories.
The U.S. commercial paper sector shrank for a second
straight week to $1.817 trillion in the week ended April 9,
down $10.8 billion from a week earlier, as a slipping economy
exacerbated the credit market strains buffeting short-term loan
markets.
This contraction in commercial paper could be a sign that
companies are starting to cut back on capital investment and
rein in business plans as the U.S. economic downturn takes
hold.
But huge crude oil purchases by China, the world's
second-biggest energy consumer, capped losses. March crude oil
imports into China leapt by a quarter from a year ago to a
record-high of 17.3 million tonnes. []
Ali al-Naimi, oil minister for top OPEC producer Saudi
Arabia, on Thursday shrugged off calls from consumer nations to
boost production, saying that supplies were adequate and record
prices were not due to a lack of oil. []
Saudi Arabia, the world's top crude exporter, will supply a
little more oil to one of its Asian customers next month, but
shipments to at least three other lifters will be unchanged,
refinery sources said on Friday. []
The cartel will attend an industry gathering in Rome later
this month, but are not expected to call a meeting there to
review output policy.
Members of the cartel argue speculators are driving up
prices, and say an extraordinary meeting before the scheduled
September meeting is not needed.
(Editing by Ramthan Hussain)
