* U.S. crude stocks at 16-year high-EIA
* European markets slip after 4-day rally
* Japan Feb exports, crude imports plunge
(Adds EIA data, updates prices, adds comment)
By Chris Baldwin
LONDON, March 25 (Reuters) - Oil retraced early losses on
Wednesday, rising to around $54 a barrel after the U.S. Treasury
Secretary said he was "quite open" to recent Chinese suggestions
on moving to a new global reserve currency.
Oil appeared little moved by data from the Energy
Information Administration that showed U.S. weekly crude stocks
rose last week to their highest since 1993. []
Analysts had expected an increase in stockpiles of 1.1
million barrels, according to a Reuters poll.
U.S. light crude for May delivery <CLc1> was up 10 cents at
$54.08 a barrel by 1552 GMT, after earlier falling by as much as
$2.12.
London Brent crude <LCOc1> was down 19 cents to $53.31.
"It seems as if the market is ignoring the real fundamental
picture in the industry," analyst Gene McGillian at Tradition
Energy in Connecticut said.
"These are high inventories but the market has rallied on
the economic measures taken by the Fed and others, which could
improve demand later in the year. There's probably more upside
to come," he said.
U.S. crude lost $2 ahead of the EIA data, but rallied
quickly after U.S. Treasury Secretary Tim Geithner said he was
"quite open" to China's suggestion of moving towards a currency
system linked to the International Monetary Fund's strategic
drawing rights.[]
Geithner later said the dollar was still the world's reserve
currency and was likely to remain so for a long time.
[]
Japan, the world's second-largest economy, posted a record
drop in February for exports -- down 49.4 percent -- as global
demand for Japanese cars and electronics evaporated.
[]
Crude oil import volumes to Japan fell 13.9 percent in
February, their lowest tally for the month in 20 years,
preliminary data from Japan's Ministry of Finance showed.
CAUTIOUS OPTIMISM
Analysts said an excess of crude supply on world markets
would not disappear soon, as no demand was surfacing to mop up
the excess, and last week's strong rally might have been an
overly earnest response to U.S. government stimulus plans.
"The price rise we saw in the past week was a little early,
a little excessive. There's still not a lot of demand out
there," said Simon Wardell at Global Insight, an oil trading
advisory.
"It's a market not used to 6 million barrels of spare
capacity out there. Today we're getting a bit more gloom from
the American package," he said.
On Wednesday European stocks slipped as a recent rally on
the back of a U.S. plan to purge toxic assets from banks'
balance sheets lost steam and figures showed a deterioration of
German corporate sentiment.[]
On Tuesday President Barack Obama renewed calls for leading
economies to boost stimulus spending, repair credit markets and
extend aid to poor countries when Group of 20 leaders meet in
London on April 2. []
Speaking with cautious optimism on Wednesday, a Chinese
central bank adviser said China, the world's third-largest
economy, was showing signs of improvement.
"Before (the economy) bottoms out, it has to bottom. I
believe it has bottomed, with the stimulus package and signs of
recovery in some industries," said Fan Gang, who sits on the
Chinese central bank's monetary policy advisory committee, in a
Reuters interview in Hong Kong. []
(Additional reporting Joshua Schneyer in New York, editing by
Keiron Henderson and Sue Thomas)
