* OPEC might cut in May - Iran's OPEC Governor
* U.S. crude inventories likely rose for seventh week
* Focus on economic indicators, equities
* U.S. crude for May delivery expires on Tuesday
(Updates prices)
By David Sheppard
LONDON, April 21 (Reuters) - Oil pared early losses to trade
back above $46 a barrel on Tuesday, bouncing off its lowest
level in almost five weeks as traders awaited more clues on
demand from U.S. economic, corporate and oil inventory data.
U.S. crude for May delivery <CLc1>, which expires later on
Tuesday, dropped to a low of $43.83 a barrel, before recovering
to trade up 31 cents at $46.19 by 1655 GMT.
U.S. crude lost $4.45 on Monday, the biggest daily loss
since January. The contract for June delivery is trading around
$48 a barrel.
London Brent crude <LCOc1> rose 43 cents to $50.29.
"Trading on the U.S. crude contract for May is volatile
ahead of expiration," Addison Armstrong at Tradition Energy in
Stamford, Connecticut.
Oil prices have been tracking moves in equities as traders
look for signs of a recovery from the slowdown which has curbed
demand for oil around the world.
European and U.S. equities fluctuated in and out of negative
territory following a mixed bag of corporate results. While
British retail giant Tesco <TSO.L> and United Technologies Corp
<UTX.N> posted bumper profits, chemical maker Dupont Co <DD.N>
reported a 59 percent fall in quarterly earnings. []
The focus also returned to the health of the financial
system, after the International Monetary Fund said global
write-downs of toxic debt among financial institutions still had
a long way to go, and could reach $4.1 trillion.
"Prices fell sharply with equities earlier in the session,
but they do seem to be stabilising now," said Bache Commodities
broker Christopher Bellew in London.
"We should still remain in the recent range."
OPEC
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 OPEC's
high compliance with agreed supply cuts.
The Organization of the Petroleum Exporting Countries meets
again on May 28.
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.
"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.
(Editing by James Jukwey)
