* Large stockpiles continue to weigh on U.S. crude
* Brent/U.S. crude differential widens to $11.27
* Coming Up: U.S. weekly jobless claims 1330 GMT
(Updates prices, adds quotes, new graph)
By Claire Milhench
LONDON, Jan 27 (Reuters) - Brent crude oil pushed towards
its biggest premium over U.S. crude in two years on Thursday as
high inventories weighed on U.S. crude, while Brent remained
supported by tight supplies and investors' momentum bets.
By 1159 GMT, the premium of Brent to U.S. crude was at
$11.22, close to its highest since January 2009 after earlier
touching $11.27.
"Brent is racing away towards $100 a barrel like there is no
tomorrow, and the Brent premium to WTI continues to widen to
unprecedented level," said Olivier Jakob, an analyst at
Petromatrix.
U.S. benchmark crude oil for March delivery <CLc1> was down
60 cents to $86.73. ICE Brent for March <LCOc1> was up 0.04
cents to $97.95 after rising 2.8 percent on Wednesday.
"The front month of U.S. crude is very weak due to high
inventories at Cushing," said Christophe Barret, global oil
analyst at Credit Agricole Corporate & Investment Bank.
According to the Energy Information Administration, stocks
at the Cushing, Oklahoma terminal rose by 862,000 barrels
week-on-week due to a fall in refinery utilisation and rising
imports.
Cushing is the delivery point for the New York Mercantile
Exchange's benchmark West Texas Intermediate (WTI) crude
futures.
Overall U.S. crude inventories rose more than expected in
the week to Jan. 21, up 4.84 million barrels, compared with a
forecast for 1.2 million in a Reuters analyst poll.
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"The statistics published yesterday were globally relatively
bearish. They showed strong increases in crude oil stocks on the
U.S. Gulf Coast, and in the week before we saw a big increase
too. It seems that high prices are now impacting demand," said
Barret.
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For a graphic on the U.S. crude/Brent spread, click on:
http://graphics.thomsonreuters.com/gfx1/CJO_20112701105849.jpg
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Investors and analysts also attributed the wide spread to a
combination of tight supply in Brent and momentum chasing by
traders.
"It's partly fundamentals-driven and partly market-driven,
as the momentum chasers have been following Brent, but U.S.
crude inventories are also more extended," said Gavyn Davies,
chairman of Fulcrum Asset Management, a UK-based hedge fund
manager.
JP Morgan analysts pointed to an ongoing decline in North
Sea crude supplies, while Thorbjorn Bak Jensen, an oil market
analyst at Global Risk Management, said that strong demand from
European refineries was also underpinning Brent.
The dollar <.DXY> weakened slightly against a basket of
currencies, down 0.23 percent on the day. A weaker dollar means
that commodities priced in the U.S. currency become more
affordable for buyers using other currencies.
The market is now looking to U.S. weekly jobless claims data
due at 1330 GMT to give some fresh direction following the
Federal Reserve's lukewarm outlook on the economy and pledge to
continue with its stimulus package [].
The Fed said on Wednesday that continued high unemployment
justified its $600 billion bond-buying programme.
(Additional reporting by Florence Tan in Singapore; Editing by
Jane Baird)
