* Technicals show Brent to fall, WTI to rise []
* Coming Up: Weekly EIA petroleum stocks, 1430 GMT
* Goldman says fundamentals don't justify price
(Updates prices)
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 after Goldman Sachs
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 24 cents to $121.16
a barrel by 1043 GMT, off a session high of $122.19. U.S. crude
for May delivery <CLc1> gained 8 cents to $106.33.
The U.S. contract's 5.8 percent drop by close of business on
Tuesday from Friday was the biggest two-day percentage loss
since May 2010.
The mood turned cautious as traders and analysts sought to
analyse a range of factors.
"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 Information Administration -- both said on
Tuesday that 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. 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 EIA's
inventory report at 1430 GMT. []
SUPPLIES AMPLE
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. []
OPEC spare capacity should be enough to cope with such an
outcome, provided the upheaval doesn't embroil other producer
nations. Saudi Arabia alone has more than 3 million bpd to
spare.
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 Jane Baird)
