* Front-month crude up almost 4 percent in 1st quarter
* U.S. crude stockpiles up by less than expected-API
* Coming Up: Wednesday EIA inventory report 1430 GMT
(Updates prices, adds comment)
By Chris Baldwin
LONDON, March 31 (Reuters) - Oil rose towards $83 on
Wednesday, heading for its fifth consecutive quarterly gain as
markets awaited U.S. crude inventory data later in the day.
Front-month crude futures on the New York Mercantile
Exchange <CLc1> have gained almost 4 percent so far this year,
trading up 57 cents at $82.94 a barrel at 1113 GMT.
Brent crude for May <LCOc1> rose 51 cents to $81.79.
A Reuters poll of 14 analysts showed U.S. crude oil
inventories likely rose last week for the ninth straight time.
Weekly government statistics from the Energy Information
Administration (EIA) will follow at 1430 GMT. []
"One week ago, the DOE reported a huge 7.25 million barrel
increase in crude inventories...prices held steady, gathered
their forces and then forged higher," publisher Dennis Gartman
wrote in his closely-followed newsletter for oil traders.
"Markets that rise on bearish news are impressive enough,
but markets that rise on overtly bearish news are truly
impressive. This is one such market."
U.S. oil demand in the past few weeks has posted its first
year-on-year gain in 18 months, while Chinese imports are
surging, reflecting sustained growth for the world's top two oil
users.
Oil-product inventories in the U.S. have been shrinking.
Stockpiles of distillate fuels including heating oil and diesel
fell by 1 million barrels last week to 147.5 million barrels,
the industry-funded American Petroleum Institute (API) reported
on Tuesday. []
"Given what the API put out last night you've got to guess
that the (EIA) news will be the same. Otherwise it's all eyes on
any significant developments in financial markets, particularly
the dollar," said broker Tony Machacek at Bache Commodities.
QUARTERLY GROWTH
After the biggest annual rise in 36 years in 2009, most
commodities continued to rebound on general optimism that the
economy is recovering and demand for raw materials will continue
to improve.
In addition, many commodities have posted strong sales to
China, the largest consumer of many goods such as base metals
and food staples.
For a graphic on commodities Q! performance, see:
http://graphics.thomsonreuters.com/310/CMD_Q1PRF0310.gif
Oil prices this quarter have traded from a peak of $83.95 in
January, the highest since October 2008 at the height of the
financial crisis, to a low of $69.50 a barrel in February.
That sub-$15 range is more stable than the wide price swings
in 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
OPEC officials meeting in Cancun, Mexico will complete a
two-day meeting against a backdrop of price stabilisation around
$80 per barrel, but showed no signs of clear consensus on how to
respond if prices were to rise further. []
(Additional reporting by Alejandro Barbajosa in Singapore,
editing by James Jukwey)
