* NYMEX gains to 2-1/2 yr high of $113.70; Brent touches
$125.83
* Dollar sinks to a 3-year low against major currencies
* Fed appears in no rush to tighten monetary policy
* Brent crude to rise further to $128.49/bbl -technicals
[]
* Coming up: U.S. GDP preliminary Q1-Adv; 1230 GMT
(Adds Japan's factory output, updates prices)
By Manash Goswami
SINGAPORE, April 28 (Reuters) - U.S. crude futures rose to
their highest in 2-1/2 years on Thursday as the Federal Reserve
appeared in no rush to tighten its monetary policy, weakening
the dollar, and as gasoline stockpiles fell more than double the
forecast.
NYMEX crude for June <CLc1> gained 44 cents to $113.20 a
barrel by 0611 GMT, but off an earlier high of $113.70. Brent
<LCOc1> gained 33 cents to $125.46 a barrel, after settling at
$125.13 a barrel.
Chairman Ben Bernanke signaled the central bank was not in a
hurry to scale back support for the economy with the labor
market still in a "very, very deep hole," resulting in the
Nasdaq surging to a 10-year high on Wednesday and gold jumping
to a record. The dollar sank to a three-year low against major
currencies on Thursday.
"The main factor is that the U.S. monetary policy will
remain accommodative for quite a long time," said Ben Westmore,
commodities economist at the National Australia Bank. "For the
oil market in particular, the decline in gasoline inventories in
the U.S. is a positive for prices."
U.S. gasoline inventories fell by 2.51 million barrels to
205.59 million barrels, the Energy Information Administration
showed on Wednesday, the lowest level since August 2009 and the
lowest level for April since 2007. Analysts had forecast a 1.1
million-barrel draw.
Crude oil stocks surged by more than 6 million barrels last
week as imports rose. Domestic crude stocks rose 6.16 million
barrels in the week to April 22 to 363.13 million barrels, the
report showed, versus expectations for an 800,000-barrel build
in a Reuters poll of analysts.
"Improved consumer confidence in April and holiday travel
around the Easter holiday may help to explain why the gasoline
demand numbers held up," Harry Tchilinguirian, head of commodity
markets strategy at BNP Paribas, said in a report.
Gasoline stocks may decline for "another week or two before
the usual pre-summer build-up," due to exports, particularly to
Brazil, and maintenance shutdowns in units that produce the
fuel, the report said.
DEMAND UNCERTAINTY
Still, oil prices may slide in the next couple of days on
expectations that demand in top consumer the United States may
weaken because of slower economic growth, analysts said.
In a fresh quarterly forecast, the Fed revised down its
growth estimate for 2011 to between 3.1 percent and 3.3 percent
from the 3.4 percent to 3.9 percent it saw in January. It said
the recovery was proceeding at a "moderate pace," a shift from
March, when it said it was on "firmer footing." The government
releases its first estimate of first quarter GDP on Thursday.
Growth in U.S. gross domestic product -- a measure of all
goods and services produced within U.S. borders -- probably
slowed to a 2 percent annual rate or even less, according to a
Reuters survey, after a 3.1 percent fourth quarter pace.
"Oil prices may weaken in the next couple of days because
U.S. growth is expected to slow, and the Fed has already revised
down its growth estimates," Westmore said, adding that U.S. oil
futures may trade in the $100-$110 range in the next few days.
U.S. crude prices have risen more than 20 percent so far
this year. Lower interest rates tend to fuel commodity prices by
driving investors into riskier assets. While the Federal Reserve
noted energy and commodity prices were rising, it said their
effects would be "transitory".
Factory output in Japan, the world's third-largest oil
consumer, fell at a record pace in March but manufacturers
expect production to rise in coming months, a sign factories
could bounce back earlier than expected as they repair supply
chains following the earthquake and tsunami. []
MIDDLE EAST UNCERTAINTY
Another factor supporting oil prices is the social unrest in
the Middle East.
"There is still a $20-$25 a barrel risk premium on prices
because of the Middle East," Westmore said. "Without new
information, we are going to prices supported because of this."
The United States took steps to throw a financial lifeline
to rebels controlling eastern Libya while forces loyal to Libyan
leader Muammar Gaddafi focused their firepower on pockets of
resistance in the west. []
"The market is now focused on the challenges that lie ahead
to bring Libyan production back to pre-crisis levels should the
current turmoil subside," Morgan Stanley analysts including
Hussein Allidina said in a report. "An organized government is
needed quickly to establish a legal governing body to oversee
the entire operation."
(Editing by Clarence Fernandez)
