* OPEC may cut in May - Iran's OPEC Governor
* U.S. crude inventories likely rose for seventh week
* Focus on further U.S. economic indicators, equities
* U.S. crude for May delivery expires on Tuesday
(Updates prices, changes dateline from SINGAPORE)
By David Sheppard
LONDON, April 21 (Reuters) - Oil steadied below $46 a
barrel on Tuesday, pausing after an almost 9 percent fall a day
earlier as traders awaited more cues on demand from U.S.
economic, corporate and oil inventory data.
The focus is back on the state of the economy in
the world's biggest energy consumer after Bank of America
<BAC.N>, the largest U.S. bank, posted a jump in bad loans,
sending equity markets and most commodities down.
Shares on Wall Street and Asia fell sharply, but European
shares were firmer in early trade on Tuesday as energy companies
recovered some ground lost in the previous session. []
Bonds and other traditional safe-haven assets such as gold
<XAU=> jumped as investors fretted a sharp rally in global
stocks since early March could be over. []
U.S. crude for May delivery <CLc1>, which expires later in
the day, edged up 5 cents to $45.93 a barrel by 0845 GMT,
after plunging $4.45 on Monday. London Brent crude <LCOc1> rose
44 cents to $50.30.
"Oil fundamentals are not tight enough to carry crude above
$55 a barrel and as soon as the combined support of strong
equities and weak dollar goes missing then crude oil starts to
move back," Petromatrix analyst Olivier Jakob said.
Strength in the dollar contributed to oil's sharp fall on
Monday, as dollar-priced commodities become more expensive for
holders of other currencies.
The Chicago Board Options Exchange Volatility Index <.VIX>,
Wall Street's barometer for fear, jumped more than 15 percent on
Monday, the largest daily percentage gain since Jan. 20.
Oil has been trading in a tight band between $46 and $55 for
the past month, after rallying steadily since mid-February from
the mid-$30s, helped by hopes of economic recovery and optimism
over OPEC's compliance with agreed supply cuts.
The Organization of the Petroleum Exporting Countries meets
again on May 28 to discuss output levels.
Iran's OPEC governor said on Tuesday the producer group may
decide to further cut its oil output if the oil market continued
to remain oversupplied, and expressed concern consumer countries
are stockpiling oil due to lower prices.
"OPEC may decide to further cut its output in its next
meeting if the market remains oversupplied," Mohammad Ali
Khatibi told reporters on the sideline of Iran's International
Oil and Gas exhibition.
"Consumer countries are increasingly stockpiling oil."
The producer group has cut member output quotas by 4.2
million barrels per day since September in a bid to underpin
prices as the global slowdown has cut demand.
Despite OPEC's efforts, crude oil inventories in the United
States have risen to the highest level since September 1990.
Traders will be eyeing an early snapshot of this week's
U.S. oil inventory data, with the American Petroleum Institute
due to release figures later in the day ahead of the more
authoritative numbers from the Energy Information Administration
on Wednesday.
U.S. crude oil inventories likely rose for the seventh week
in a row last week on higher imports and as seasonal maintenance
cut refinery demand, a preliminary Reuters poll showed. []
On average, the poll forecast a crude inventories increase of
2.6 million barrels, an 800,000 barrel drawdown in gasoline
stocks and a 500,000 barrel fall in distillates.
(Additional reporting by Chua Baizhen in Singapore; editing by
Sue Thomas)
