* Front-month crude up almost 4 percent in 1st quarter
* U.S. crude stockpiles rose less than expected- API
* Coming Up: EIA inventory report, 10:30 EDT
(Adds implied volatility graph, Cancun meeting background)
By Alejandro Barbajosa
SINGAPORE, March 31 (Reuters) - Oil, steady above $82 on
Wednesday, was headed for its fifth consecutive quarterly gain
as recovering demand outweighs ample supplies and concern over
monetary tightening in leading economies.
"What will support the oil market from a fundamental point
of view will be demand growth," said John Vautrain, senior vice
president of Purvin & Gertz Inc in Singapore. "By and large
Asia is pretty good. There are islands of weakness and a sea of
strength."
Front-month crude futures on the New York Mercantile
Exchange <CLc1> have gained almost 4 percent since Dec. 31
2009, trading at $82.30 a barrel at 0455 GMT, down 7 cents from
Tuesday. Brent crude for May <LCOc1> declined 13 cents to
$81.15 in London.
Prices traded as low as $69.50 this quarter in February,
having touched $83.95 a barrel in January, the highest since
October 2008 at the peak of the financial crisis.
That range of less than $15 is much more stable than the
wide price swings of the previous two years. Implied volatility
for U.S. crude is now at its lowest level since prices surged
to a record $147.27 a barrel on July 11, 2008, before
plummeting to $32.40 in December of that year.
For a graphic of crude implied volatility, see:
http://graphics.thomsonreuters.com/gfx/RSW_20103103115220.jpg
Officials from the Organisation of the Petroleum Exporting
Countries (OPEC) on Tuesday appeared undecided on how to
respond if oil prices rose definitively above the $70-80 a
barrel range they have praised this month. []
SEEKING STABILITY
Some major consumers at the biannual International Energy
Forum (IEF) being held in Cancun, Mexico this week agreed with
OPEC members' claims that a price of $70-80 price was good for
both sides, providing sufficient revenues for producers and
incentives to build new projects, but not so high as to choke
off growth in importing nations. []
The IEF aims to produce a statement when the meeting
concludes on Wednesday outlining measures to minimize oil price
volatility, including steps to increase market transparency.
U.S. oil demand in the past few weeks has posted its first
year-on-year gains in 18 months, while Chinese imports are
surging, reflecting sustained growth for the world's top two
oil users.
And oil-product inventories in the U.S. have been
shrinking. Stockpiles of distillate fuels including heating oil
and diesel decreased by 1 million barrels last week to 147.5
million barrels, the industry-funded American Petroleum
Institute (API) reported on Tuesday.
Gasoline stocks dropped by 946,000 barrels, falling to
223.2 million barrels, the API said. Crude supplies rose
421,000 barrels, compared with a Reuters survey forecasting an
average increase of 2.4 million barrels.
Weekly government statistics from the Energy Information
Administration will follow later on Wednesday.
Japan's Nikkei average briefly hit an 18-month high on
Wednesday, with further gains expected in the new quarter as
the global economic recovery picks up strength. []
U.S. non-farm payrolls probably increased in March, boosted
by temporary census hiring and a snapback from February's
weather-related losses, a Reuters survey showed ahead of
Friday's key report.
This would mark only the second time payrolls have
increased since the recession started in December 2007.
"The central banks have flooded the market with liquidity.
Unemployment growth in the U.S. has tapered off, equity markets
have stabilised and all this money floating around pushes up
the price of commodities," Vautrain said.
U.S. stocks ticked higher on Tuesday as optimistic data
prompted the view the economy is stabilising.
Consumer confidence rebounded in March while a closely
watched housing index showed home prices rose in January for
the eighth straight month. []
(Additional reporting by Ryan Siew; Editing by Ed Lane, Himani
Sarkar)
