* Kuwait halts oil exports on bad weather
* Technicals show Brent to fall, WTI to rebound
[]
* Coming Up: Weekly EIA petroleum stocks, 1430 GMT
(Recasts with Kuwait disruption, adds background, updates
prices)
By Florence Tan
SINGAPORE, April 13 (Reuters) - Brent crude rebounded to
above $122 on Wednesday, halting a two-day decline, on fears
that the Libya conflict could settle into a bloody stalemate,
while a sudden disruption in Kuwaiti oil exports boosted
sentiment.
The market shrugged off concerns raised by the IEA and IMF
earlier this week that high oil prices are beginning to dent oil
demand, as well as a Goldman Sachs forecast that Brent prices
would decline sharply.
ICE Brent crude for May <LCOc1> rose $1.22 to $122.14 a
barrel by 0642 GMT after hitting a high of $122.19. U.S. crude
for May delivery <CLc1> reversed earlier losses, and climbed 66
cents to $106.91 a barrel.
The NYMEX contract's earlier 5.8 percent drop from Friday
was the biggest two-day percentage loss since May 2010.
"The market is still feeling bullish as there were some
disruptions to oil supplies from Kuwait," said Serene Lim, an
analyst with ANZ. "Traders could also be buying on dips."
OPEC member Kuwait has temporarily halted oil export
operations due to bad weather, a spokesman for the oil sector
said on Wednesday. []
Oil also 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," Ben Le Brun,
Sydney-based analyst at CMC Markets said.
Foreign ministers meet in Qatar on Wednesday for talks on
Libya's future. []
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. [] []
GASOLINE STOCKS DOWN
A larger-than-expected drop in gasoline stocks in the United
States last week ahead of the peak driving season also lifted
sentiment.
"Gasoline-related factors should drive oil prices (in the
near term)," Tetsu Emori, a Tokyo-based commodities fund manager
at Astmax Investments said.
Gasoline and distillates stocks fell more than expected 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.
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.
(With additional reporting by Seng Li Peng; Editing by Ed Lane)
