* U.S. crude up against analysts's forecasts for fall
* European flights resume after volcanic ash disruption
* U.S. dollar firms as euro falls on Greece debt woes
* Coming up: IMF meetings in Washington begin April 22
By Gene Ramos
NEW YORK, April 21 (Reuters) - U.S. oil prices edged
slightly lower on Wednesday as a rise in U.S. crude and refined
product inventories outweighed support from strong Chinese
demand data and the resumption of European airline flights.
U.S. crude oil inventories rose 1.9 million barrels last
week despite a forecast for a slight drop, Energy Information
Administration (EIA) oil inventory data showed. []
Distillate and gasoline stockpiles increased more than
expected. Analysts said the build in inventories raised
concerns about a recovery of U.S. fuel demand, which was hit
hard by the recession.
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"The energy complex absorbed today's bearish EIA report
quite well, especially in view of some dollar strength and only
limited change in the equities," said Jim Ritterbusch,
president of Ritterbusch & Associates, independent trading
consultants in Galena, Illinois.
U.S. June crude futures <CLc1> ended down 17 cents at
$83.68 a barrel, after dropping to a session low of $82.92.
Volume for the new front-month was heavy at an estimated
403,000 contracts, according to Reuters data.
Earlier, crude prices found strength from the resumption of
European flights which bolstered the outlook for jet fuel
demand and lifted U.S. heating oil futures, the benchmark for
jet fuel trading.
ICE Brent crude <LCOc1> settled 90 cents higher at $85.70 a
barrel, after hitting a high of $86.16. Volume reached 200,000
contracts.
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.
CHINA STRENGTH
Data showed 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. []
Rising consumption in China has helped support crude prices
as demand from the United States and other developed economies
struggles to rebound from the recession.
The strength of the dollar against the euro also helped pin
down crude futures. The euro weakened for the fifth day against
the greenback due to ongoing uncertainty about Greece's debt
crisis. []
A stronger dollar makes commodities more expensive for
those holding alternative currencies.
In related news, 11 workers were missing and 17 injured in
an explosion at a Transocean <RIGN.S> <RIG.N> oil drilling rig
off Louisiana, and crews were fighting the fire 16 hours later,
the U.S. Coast Guard said on Wednesday. []
(Additional reporting by Robert Gibbons in New York, Joe Brock
and Ikuko Kurahone in London, Alejandro Barbajosa in Singapore;
editing by Jim Marshall)
