* IEA trims 2010 global oil demand growth forecast
* High Cushing stocks depress U.S. crude relative to Brent
* China should raise interest rates-central bank adviser
* Coming Up: EIA inventory report 1430 GMT
(Updates with IEA forecast, previous SINGAPORE)
LONDON, May 12 (Reuters) - Oil fell towards $76 a barrel on
Wednesday after the International Energy Agency (IEA) trimmed
its 2010 oil demand forecast and as investors awaited U.S.
inventory data expected to show rising supplies.
Global oil demand growth this year will be 50,000 barrels
per day (bpd) lower than expected, the IEA, adviser to 28
industrialised countries on energy, said in its monthly report.
It still expects a 1.62 million bpd increase in demand in 2010.
"We've seen a shift in sentiment and sentiment is still
bearish," said Carsten Fritsch, analyst at Commerzbank.
"The main reasons are questions regarding the stability of
the eurozone and whether these optimistic demand forecasts will
be met given this new uncertainty."
U.S. crude for delivery in June <CLc1> was down 22 cents at
$76.15 a barrel as of 0943 GMT, having fallen as low as $75.42
earlier in the session. Brent crude <LCOc1> was up 35 cents at
$80.84.
European shares jumped more than 1 percent and the euro
strengthened on signs of continued German growth and Spain's
plans to cut its deficit, offering oil some support.
A weaker dollar makes dollar-denominated commodities cheaper
for other currency holders.
The premium of Brent over U.S. crude, also known as West
Texas Intermediate (WTI), ballooned overnight after industry
group the American Petroleum Institute (API) said crude
stockpiles at Cushing rose to a new record high of more than 37
million barrels last week.
For a graph on Brent's premium over U.S. crude:
http://graphics.thomsonreuters.com/gfx/NT_20101205134402.jpg
The discount of the front-month U.S. contract to the second
month also widened sharply overnight.
ROLLER COASTER
Oil prices have been volatile since the European Union
announced a rescue package for the bloc's debt-stricken nations
totalling almost $1 trillion two days ago.
"The market first reacted with short-covering on the news,
but then we found that the problem is still there," said Keichi
Sano, general manager of research at SCM Securities in Tokyo.
"It is still not so optimistic about the EU economy even
after the huge commitment. I'm bullish in the middle term still,
but short-term circumstances are really bad."
U.S. crude had touched $87.15 on May 3, its highest level in
almost 19 months, on optimism that the global economic recovery
would boost demand after two straight years of declines.
Government data on U.S. inventories will be released at 1430
GMT on Wednesday. The report is expected to show a
1.3-million-barrel increase in crude supplies.
On Tuesday, the API said crude stocks rose by 362,000
barrels. Inventories at Cushing gained 783,000 barrels. []
Accelerating inflation has increased pressure on China, the
world's second-largest oil user, to tighten monetary policy and
let the yuan appreciate against the dollar.
China should raise benchmark deposit rates as a defensive
move to stabilise inflation expectations, a central bank adviser
said in comments published on Wednesday. []
(Reporting by Alejandro Barbajosa and Alex Lawler; editing by
James Jukwey)
