(Fixes typo in headline)
* Oil pares previous losses, can't match other markets
* Supply in focus; stocks rise, Russia output at record
* Spreads flare, may augur correction
(Updates prices)
By Nick Trevethan
SINGAPORE, Dec 3 (Reuters) - U.S. crude futures edged
highger Thursday after slipping 2.3 percent a day earlier on a
larger-than-expected build in U.S. crude inventories.
A weaker dollar, record gold prices, copper near 14-month
peaks and a 3.4 percent rally in Japan's main equity market
<> did little to counter worries about rising inventories
and slow demand.
"Oil is in a range. It will stay there for the rest of the
year, and probably through the first quarter of 2010, unless we
see something geopolitical come from left field -- maybe from
Iran," said Peter McGuire, managing director of CWA Global
Markets.
Oil has traded in a $14-range this quarter, which narrowed
to $9 last month, bounded by a low of $72.39 when panic over
Dubai's debt situation sent commodities reeling for a few
hours, and $81.06 as the upper threshold.
NYMEX crude for January delivery <CLc1> rose 24 cents to
$76.84 a barrel by 0538 GMT, after settling down $1.77 at
$76.60 on Wednesday.
Brent crude <LCOc1> rose 48 cents to $78.36 per barrel.
Wednesday's losses, which stemmed a two-day advance, came
after U.S. government data showed crude stocks rose 2.1 million
barrels last week, topping the forecast for a 400,000 barrel
rise in a Reuters poll. []
Gasoline futures slumped on Wednesday as the data from the
U.S. Energy Information Administration showed gasoline stocks
increased much more than forecast. Distillate stocks fell 1.2
million barrels, against the forecast for a 300,000-barrel
drop. "Markets finally are swinging focus back to the
supply dynamic. The inventories were another warning shot
across the bow," said ANZ's senior commodities analyst, Mark
Pervan.
Adding to the concerns over rising supply, Russia set a
fourth consecutive monthly record for crude oil output in
November to retain its position as the world's largest
producer. []
Pervan added: "What might rescue oil from a big sell-off is
a seasonal demand pick-up and the healthy array of long and
short positions in the market, so crude is not heavily
overbought."
Traders said widening spreads between nearby prices and
those further in the future were also a cause for concern.
"The spread between the first and second months has blown
out...Something is up," a trader in Sydney said, adding that
the big sell-off late last year was also heralded by a flare in
spreads.
Front month crude traded $1.64 below the second month
<CLc2> contract, from around $0.50 in the middle of last month.
"At this time before expiry, the spread should be 30-40
cents. Someone is selling near-dated oil, I am guessing on
worries demand in the United States is falling of a cliff."
For a graphic showing oil prices and spreads, click:
http://graphics.thomsonreuters.com/129/CMD_OILSPRD1209.gif
(Editing by Michael Urquhart)
((nicholas.trevethan@thomsonreuters.com; +65 6870 3822;
Reuters Messaging:
nicholas.trevethan.reuters.com@reuters.net))
((If you have a query or comment on this story, send an email
to news.feedback.asia@thomsonreuters.com))
