* U.S. crude up, against analysts forecast for fall
* European flights resume after volcanic ash disruption
* U.S. dollar firms as euro falls on Greece debt woes
(Recasts, adds market activity, analysts comments, changes
byline, previous LONDON)
By Gene Ramos
NEW YORK, April 21 (Reuters) - Oil prices rose slightly on
Wednesday, as the resumption of European flights and strong
Chinese demand outweighed a bearish rise in U.S. crude and
refined product inventories.
U.S. heating oil futures, the benchmark to trade jet fuel,
led the oil complex higher. Flight bans, related to an ash
cloud caused by an Icelandic volcanic eruption, were lifted on
Tuesday, alleviating concerns some investors had over the
impact the disruptions would have on fuel demand.
[]
"The only token support I can see on this heating-oil led
rise in crude futures is some fundamental support developing as
European airports have reopened after being disrupted for days
by the spread of the Icelandic volcanic ash," said Tim Evans,
analyst at City Futures Perspective in New York.
"And that is restoring some jet fuel demand that had been
absent recently," Evans added.
U.S. crude futures <CLc1> traded up 26 cents to $84.11 a
barrel by 2:03 p.m. EDT (1803 GMT), after dropping to a session
low of $82.92 in the wake of the EIA inventory report. ICE
Brent crude <LCOc1> gained $1.10 to $85.90 a barrel.
U.S. crude oil inventories rose 1.9 million barrels last
week, against the forecast for a slight drop, the Energy
Information Administration (EIA) oil inventory data showed.
[]
Distillate and gasoline stockpiles increased more than
expected. Analysts said the inventories builds raised concerns
about recovery of U.S. fuel demand, which was hit hard by the
recession.
"Crude futures are up, but this shouldn't be the case here,
looking at inventories, particularly product stocks, being up.
The fundamental picture shows there is no strong case for
prices going up," said Gene McGillian, analyst at Tradition
Energy in Stamford, Connecticut.
"Also, the equities market is down and the dollar is up.
However, prices appear to have underlying support from China
where oil imports remain bubbly," he added.
Further support came from data showing China's implied oil
demand in March rose 12.3 percent from a year earlier, the
seventh month of double-digit growth in a row, as warming
weather boosted dormant farming activities.
The world's second-largest oil user consumed 8.25 million
barrels of oil per day last month, 4.6 percent or 400,000 bpd
less than February, according to Reuters calculations based on
official data. []
A strong dollar has also held down any gains for crude. The
euro fell for the fifth day against the greenback due to
ongoing uncertainty about Greek's debt crisis. []
A stronger dollar makes commodities more expensive for
those holding alternative currencies.
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here:
http://graphics.thomsonreuters.com/gfx/ACO_20102104085023.jpg
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(Additional reporting by Robert Gibbons in New York, Joe Brock
and Ikuko Kurahone in London, Alejandro Barbajosa in Singapore;
Editing by Marguerita Choy)
