* Technicals show Brent to fall, WTI to rise []
* Coming Up: Weekly EIA petroleum stocks, 1430 GMT
* Goldman says fundamentals don't justify price
(Updates throughout, previous SINGAPORE)
LONDON, April 13 (Reuters) - Oil crept back above $121 on
Wednesday, partly reversing a deep sell-off, as foreign
ministers met for talks on Libya's future and the market awaited
U.S. inventory data for possible signs of demand attrition.
Wednesday's modest gains followed a two-day sell off driven
by comment from representatives of consumer countries that high
prices had begun to depress consumption and Goldman Sachs bank
said a rally, which took Brent to a two-and-a-half year high
above $127 on Monday, looked overdone.
ICE Brent crude for May <LCOc1> rose by 33 cents to $121.25
a barrel by 0851 GMT after hitting a session high of $122.19.
U.S. crude for May delivery <CLc1> shed two cents to $106.23.
The NYMEX contract's 5.8 percent drop from Friday by close
of business on Tuesday was the biggest two-day percentage loss
since May 2010.
As traders and analysts sought to analyse a range of
factors, the market mood was cautious.
"There have been plenty of negative factors for oil in the
last 48 hours," Ben Le Brun, Sydney-based analyst at CMC Markets
said.
"It's probably not a bad thing as inflation is the biggest
buzzword around the market."
Reports from representatives of consumer countries the
Paris-based International Energy Agency and the U.S.
government's Energy Intelligence Administration both said on
Tuesday high oil prices were beginning to brake the pace of
economic growth and erode demand for fuel.
The IEA nevertheless left its 2011 fuel demand growth
forecast unchanged, as did the Organization of the Petroleum
Exporting Countries, while the EIA trimmed its prediction for
2012. []
Industry data late on Tuesday showed U.S. crude inventories
unexpectedly rose last week and oil product stocks fell as U.S.
refinery use plunged.
The figures will be followed on Wednesday by the U.S. Energy
Information Administration's inventory report at 1430 GMT.
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OPEC has repeatedly said there is more than enough oil in
the market to meet demand.
Leading exporter Saudi Arabia has said it will pump extra
crude if there is a need, but following a big increase in March,
Saudi-based industry sources said the kingdom had reined in
production. []
A new blend the kingdom produced to compensate for barrels
of light, easy-to-refine crude lost to Libyan unrest, has met a
muted response from the market.
Violence in OPEC-member Libya has shut off most of its
production, which reached around 1.6 million bpd before unrest
began.
Oilfields controlled by rebels are pumping around 100,000
barrels per day (bpd), but only a "minimal amount" is being
exported, a rebel spokesman said on Wednesday. []
He was speaking in Qatar, where ministers gathered for talks
on Libya's future. Some participants were eager for air strikes
against Muammar Gaddafi's forces as they feared the conflict
could settle into a bloody stalemate. []
Even that would only represent a modest demand shock,
compared with previous supply disruptions, and OPEC spare
capacity should be enough to cope with it provided the upheaval
doesn't embroil other producer nations.
Saudi Arabia alone has more than 3 million bpd to spare and
the hitherto bullish Goldman Sachs said on Tuesday speculators
had pushed prices ahead of fundamentals of supply and demand.
[]
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More on Middle East unrest: [] []
Libya Graphics http://link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
For a technical chart on WTI-Brent, click:
http://graphics.thomsonreuters.com/WT1/20111304101313.jpg
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(Additional reporting by Florence Tan and Seng Li Peng in
Singapore; Editing by Alison Birrane)
