* Technicals show U.S. crude heading below $90
[]
* IEA revises upwards oil demand growth, but not by much
* Alaskan pipeline boosting flows towards 500,000 bpd
(Updates throughout, previous SINGAPORE)
By Barbara Lewis
LONDON, Jan 18 (Reuters) - Brent oil edged higher on Tuesday
after OPEC stuck to its view there was ample supply on the
market, while the International Energy Agency said economic
recovery would spur a gradual rise in demand.
Gains were capped by the resumption of crude through the
Trans-Alaskan pipeline, which could add to inventory levels in
top oil consumer the United States.
Brent for March <LCOc1> added 42 cents to $97.85 a barrel by
1112 GMT. The front-month Brent contract on Friday touched
$99.20, the highest price since October 2008.
U.S. crude <CLc1> fell 4 cents to $91.50.
In its latest monthly report on Tuesday, the IEA, which
advises 28 industrialised countries on energy policy, said world
oil demand growth in 2011 would be slightly higher than it had
previously expected, although it would not reach the
"exceptional levels" of last year. []
Its emphasis was still bullish compared with the
Organization of the Petroleum Exporting Countries, whose members
have consistently said the world has enough oil and any price
rises were the result of non-fundamental factors.
"Oil prices have recently been driven by technical matters
such as events in Alaska and the North Sea. Also, the weak
dollar and speculation have added to this, pushing oil prices
higher, especially Brent," Secretary General Abdullah al-Badri
said in a statement on OPEC's website.
The tone echoed OPEC's monthly market report on Monday in
which it said inventories should rise over the first part of the
year. []
Anticipation OPEC will not take any early action to adjust
supplies has given justification to market bulls who have been
pushing the market towards $100, especially for Brent, the
European benchmark, which has faced tighter supplies than the
U.S. marker.
LOSING STEAM?
Some traders said a rally that set in the last part of 2010
was losing steam.
"It's been going up for two months solidly. $100 is some
sort of psychological challenge," said Christopher Bellew of
Bache Commodities brokerage, adding "a retracement" was more
likely in the near term.
A Reuters technical report showed U.S. crude could fall to
$89.51.
U.S. crude has been trading below Brent since August last
year, reflecting high levels of inventory at Cushing, Oklahoma,
the delivery point for U.S. futures.
U.S. supplies should increase following the restoration of
flows through Alaska's crude oil pipeline on Monday.
[]
Many traders have agreed with OPEC that factors beyond
supply and demand fundamentals have played a major part in oil's
rally as prices have followed strengthening equity markets and a
weakening U.S. dollar, which can stimulate buying of
dollar-denominated commodities.
The euro <EUR=> extended gains against the dollar on Tuesday
in response to a stronger than expected survey on German
economic sentiment. []
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
