* U.S. gasoline, distillates stocks fall more than expected
- API
* Technicals show Brent to fall, WTI to rebound
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* Coming Up: Weekly EIA petroleum stocks, 1430 GMT
(Updates prices)
By Florence Tan
SINGAPORE, April 13 (Reuters) - Brent crude rose above $121
on Wednesday, halting a two-day decline, as traders focused on
the stalemate in Libya and a sharp fall in U.S. gasoline stocks
ahead of peak demand season, while global agencies warned high
prices could erode demand.
Concerns grew this week that high oil prices are beginning
to dent oil demand growth and could hurt the global economic
recovery, with warnings from several key forecasters, while
Goldman Sachs' forecast of a lower Brent price also damped
sentiment.
ICE Brent crude for May <LCOc1> rose 80 cents to
$121.72 a barrel by 0525 GMT. U.S. crude for May delivery <CLc1>
reversed earlier losses, and climbed 25 cents to $106.50 a
barrel.
The NYMEX contract's earlier 5.8 percent drop from Friday
was the biggest two-day percentage loss since May 2010.
"Their expectations are too bearish even for next year. Much
higher prices should be seen in the first half of the next year
as the global economy recovers," Tetsu Emori, a Tokyo-based
commodities fund manager at Astmax Investments said, adding that
he expects prices to rise to $150 a barrel within a year.
"Gasoline-related factors should drive oil prices (in the
near term)," Emori said, pointing to a sharp drop in U.S.
inventories and the approach of the peak driving season in
summer.
However, gasoline and distillates stocks fell sharply more
than expected last week as refinery use slumped, data from the
American Petroleum Institute industry group showed late on
Tuesday.
U.S. crude inventories rose 1.2 million barrels in the week
to April 8, compared with analysts' expectations for a 1 million
barrel build in a Reuters poll.
The U.S. Energy Information Administration's inventory
report is due on Wednesday at 1430 GMT.
DEMAND FEARS
Several key forecasters, including the International
Monetary Fund, the International Energy Agency and OPEC, raised
fears global fuel demand is ebbing as consumers shunned
expensive oil.
Top oil exporter Saudi Arabia has also quietly cut
production on weaker demand, two Saudi-based industry sources
told Reuters. []
"There have been plenty of negative factors for oil in the
last 48 hours," Ben Le Brun, Sydney-based analyst at CMC Markets
said, referring to the weak forecasts and a worsening of the
Japan nuclear situation. "It's probably not a bad thing as
inflation is the biggest buzzword around the market."
High prices are beginning to dent oil demand growth and
could slow the rapid pace of global economic growth, the
International Energy Agency, an energy policy adviser to Western
consuming nations, said. []
Many traders booked profit after Goldman Sachs urged
investors to do so in its second report in as many days.
Goldman expects Brent to fall toward $105 in coming months,
the bank said in a note emailed to clients, after recommending
on Monday that they close its trade on a basket of commodities
that included U.S. crude. [] []
LIBYA STALEMATE
Oil remained supported by unrest in the Middle East and
Africa as pro-democracy protests flared up across the region
while Libya is in a stalemate after an African Union-sponsored
peace plan collapsed this week.
"With the Middle East and North Africa crisis, there is at
least a 20 percent premium built in oil prices," Le Brun said.
Foreign ministers meet in Qatar on Wednesday for talks on
Libya's future. []
BRENT-WTI TO NARROW
J.P. Morgan analysts said Brent's premium against U.S.
crude, also known as West Texas Intermediate (WTI), could narrow
in the coming month as complex refineries return from seasonal
maintenance, reducing light sweet crude demand.
"It is important to reiterate that this would be a temporary
shift," the analysts led by Lawrence Eagles said in an April 12
note. "Once we get to the end of the third quarter, the Cushing
bottleneck should once more re-emerge."
Technical charts showed Brent's premium to WTI crude
<CL-LCO1=R> is expected to narrow to $8 per barrel over the next
four weeks, Reuters market analyst Wang Tao said.
(Editing by Ed Lane)
