(Updates throughout)
By Bate Felix and Ikuko Kao
LONDON, April 8 (Reuters) - Oil prices held firm on Tuesday
after a refinery fire in Europe pressured already tight stocks
of refined products and the U.S. government's energy forecaster
predicted supplies would struggle to keep pace with demand.
U.S. crude <CLc1> fell by eight cents to $109.01 a barrel by
1452 GMT after a $3 jump on Monday. London Brent crude <LCOc1>
shed 14 cents to $107.
The energy complex was driven higher by strength in gas oil
futures, the benchmark for heating oil and diesel in Europe,
which hit a record level for a second day running.
London's gas oil futures <LGOc1> hit a new peak of $1,017 a
tonne, before easing slightly to $1,006.50.
"We made new highs this morning led by gas oil," said
Christopher Bellew of brokerage Bache Financial. "Oil is still
very strong."
European diesel supplies have been tight since last year
because of stricter environmental regulations and refinery
outages.
Supplies have come under further strain after a fire at a
diesel unit at Finnish refiner Neste Oil's 200,000 barrels per
day (bpd) Porvoo plant.
Neste said on Tuesday repairs would last into May after a
fire on Friday.
U.S. PRODUCTS ALSO TIGHT
Distillate supplies, including diesel and heating oil, were
also tight in the United States, the world's top energy
consumer.
In the near term, weakening demand could help stocks to
build.
But in a monthly report, the U.S. government's Energy
Information Administration (EIA) said supply increases from both
the Organization of the Petroleum Exporting Countries (OPEC) and
non-OPEC countries would be less than previously thought.
For the first time, it raised its full-year forecast for
U.S. light crude to more than $100 a barrel and said a slowing
U.S. economy would not be enough to check soaring oil demand.
[]
On Wednesday, the EIA is scheduled to release weekly data,
which is expected to show a 1.4 million barrel drop in
distillate stocks for the week to April 4, according to a
Reuters poll of analysts.
Crude oil inventories were seen rising by 2.2 million
barrels and gasoline falling by 2.6 million barrels. []
OPEC has said inventories are ample and has so far rejected
calls from consumers for more oil.
The group's President Chakib Khelil reiterated on Tuesday
that high oil prices were not caused by a shortage of crude and
he saw no need for OPEC to pump more.
"Nothing has changed to change at least my view of the
situation, which is there is really no need for increasing the
supply," he told reporters on the sidelines of a conference.
OPEC's second largest oil producer Iran has been locked in a
long-standing row with the West over its nuclear programme,
which oil investors fear could lead to supply disruptions.
Adding further support to oil prices, Iran's President
Mahmoud Ahmadinejad said Iran had begun installing 6,000 new
centrifuges at its uranium enrichment plant.
(Additional reporting by Luke Pachymuthu in Singapore, editing
by Barbara Lewis)
