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* Oil heads towards $57 after five-month high settlement
* U.S. gasoline stocks down, crude up less than expected
* Market eyes bank stress test results
By Maryelle Demongeot
SINGAPORE, May 7 (Reuters) - Oil extended gains towards $57
a barrel on Thursday, after settling at a five-month high in
the previous session when a falling number of U.S. job losses
and U.S. inventory data brightened hopes for an economic
revival.
Expectations for rising oil demand as summer approaches
were also fuelled by financial optimism as leaked bank stress
test results suggested most banks were healthier than earlier
thought.
U.S. light crude for June delivery <CLc1> rose 46 cents a
barrel to $56.80 by 0222 GMT, adding to $2.50 gains on
Wednesday when it settled at $56.34, its highest close since
Nov 14, 2008.
London Brent crude <LCOc1> rose 59 cents to $56.74.
"We are bullish the energy sector. Demand is still
relatively weak but if you look at seasonality, traditionally
the driving season comes into play from the middle of May and
then you worry about the hurricanes from the early part of
July," said Peter McGuire, managing director of Commodity
Warrants Australia.
A slowdown in U.S. private sector job losses in April, as
employers cut 491,000 from the salary rolls versus an expected
loss of 650,000, was seen as a signal that the economy may be
on its way to recovery, and helped oil higher. []
Oil also rose as fundamentals improved, albeit marginally,
with U.S. gasoline stocks declining unexpectedly last week by
200,000 barrels to 212.4 million, the Energy Information
Administration said on Wednesday. []
U.S. crude inventories gained again, but by a
lower-than-expected 600,000 barrels against forecasts for a 2.2
million barrels build.
This left crude stocks at a fresh 19-year high of 375.3
million barrels, while distillates stocks rose by a
larger-than-forecast 2.4 million barrels.
Oil has tracked a recovery in the equity markets over the
past month, with the U.S. S&P index up some 36 percent from
March lows, despite what many still see as weak fundamentals.
"Anticipating an economic recovery, the market is
"retaliating" with prices rising now before there are any truly
definitive signs of such an economic and/or oil demand
recovery," Canadian consultancy First Energy Capital said in a
note.
The market is now eyeing the results of the U.S. government
bank stress tests of their ability to weather a deep recession
to be released at 2100 GMT for further momentum.
About half of the 19 largest U.S. banks are expected to
need more capital.
The reported capital shortfalls so far are much larger than
analysts expected, but bank shares soared as investors got more
clarity over how well the industry would cope with perhaps the
most severe recession since World War II. []
While the focus is on demand, Saudi Arabia, the world's top
oil supplier, said it would not raise supplies for the time
being as it attempts to shore up prices.
The oil kingdom is pumping below 8 million barrels per day
(bpd) and is unlikely to increase that production as world
supply continues to outpace demand, Saudi Aramco Chief
Executive Khalid al-Falih said on Wednesday. []
