* EIA report shows crude stocks up more than expected
* U.S. crude stockpiles rose less than expected-API
(Recasts, updates prices, market activity, new byline, changes
dateline, previously LONDON)
By Robert Gibbons
NEW YORK, March 31 (Reuters) - Oil rose above $83 on
Wednesday, supported by the euro's rise against the dollar
despite U.S. government data showing crude inventory rose more
than expected and gasoline stocks had a surprise build.
Front-month crude futures on the New York Mercantile
Exchange <CLc1> traded up $1.15 at $83.52 a barrel at 1:45 p.m.
EDT (1745 GMT), not far off the $83.76 peak hit earlier.
That intraday high was near the year's high of $83.95 hit
on Jan. 11, which was the highest since October 2008.
Brent crude for May <LCOc1> rose $1.12 to $82.40.
The dollar fell against the euro, though the greenback hit
a three-month high against the yen. [] The dollar was
weaker against a basket of currencies <.DXY>.
Wednesday's U.S. Energy Information Administration oil
inventory report showed crude oil stocks rose by 2.9 million
barrels to 354.2 million barrels last week, more than the 2.4
million barrels forecast, while gasoline inventories logged a
modest but surprise gain.
The EIA report contrasted with industry group the American
Petroleum Institute's report from Tuesday showing crude oil
stocks rose only 421,000 barrels.
"On the surface you would think this is a bearish report,
especially with gasoline showing an unexpected build," Mike
Zarembski, senior commodities analyst at Optionsxpress in
Chicago, said.
"But traders are focusing on the weakness in the U.S.
dollar today, which is keeping commodity prices in general
up."
The U.S. stock market fell as weak jobs and regional
manufacturing data put hopes for an improving economy in check.
[]
The U.S. shed 23,000 jobs in March, against expectations
for a rise of 40,000 private-sector jobs, a report by private
employment service ADP showed on Wednesday. []
Business activity in the U.S. Midwest expanded less than
expected in March. [] New orders for U.S.
factories rose for a sixth straight month in February.
[]
QUARTERLY GROWTH
U.S. oil demand has been showing signs of recovery and
China's imports are rising, giving market bulls hope for
sustained growth by the world's top two oil consumers.
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 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.
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For a graphic on commodities Q1 performance, see:
http://graphics.thomsonreuters.com/310/CMD_Q1PRF0310.gif
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Oil prices this quarter have traded from that $83.95 peak
in January 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.
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For a graphic of crude implied volatility, see:
http://graphics.thomsonreuters.com/gfx/RSW_20103103115220.jpg
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The International Energy Forum in Cancun, Mexico, will
complete a two-day meeting against a backdrop of prices
stabilized in the $80 per barrel area with OPEC officials
unsure how to respond if prices push higher. []
(Additional reporting by Gene Ramos and Edward McAllister in
New York; Chris Baldwin in London, Alejandro Barbajosa in
Singapore; Editing by David Gregorio)
