* OPEC meeting in Vienna does not agree output targets
* Saudi restraint seen as market supportive
* High Middle East output offset by supply disruptions
elsewhere
* Strong demand lifts refining margins for diesel and jet
fuel
By Henning Gloystein
SINGAPORE, June 3 (Reuters) - Brent oil prices held around
$50 a barrel on Friday following an OPEC meeting that failed to
agree on output targets, but which was seen as supportive as
Saudi Arabia pledged not to flood the market with more fuel.
The Organization of the Petroleum Exporting Countries (OPEC)
failed to agree to a clear oil-output strategy on Thursday as
Iran insisted on raising production to regain market share lost
during years of sanctions, which were lifted in January.
Analysts still took away positive aspects from the meeting
in Vienna, as Saudi Arabia showed restraint.
"We will be very gentle in our approach and make sure we
don't shock the market in any way," Saudi Energy Minister Khalid
al-Falih told reporters.
As a result, international Bent crude oil futures LCOc1
held around $50 per barrel early on Friday, trading at $49.99
per barrel at 0103 GMT, down 5 cents from the last settlement
and almost double its January lows.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
trading down 9 cents at $49.08.
"The fact that Saudi Arabia strongly promoted a new higher
ceiling sent an important message that it won't open taps to
flood oil markets," ANZ bank said on Friday.
"Overall, this should be seen as a positive for oil prices.
When combined with growing disruptions around the world and
increasing declines in U.S. output, we see oil prices trending
higher over the next six months," it added.
Bank of America Merrill Lynch (NYSE:BAC) said that rising oil prices
were also being "exacerbated by seasonal dynamics, as well as
robust trend gasoline consumption growth in the U.S., India, and
even China."
The U.S. bank said that "fuelled by the lower prices, oil
consumption around the world is booming on less efficient use
(i.e. more SUV sales), less substitution effects (i.e. less
electric vehicle sales or more propane use instead of biomass),
and more economic demand (i.e. more miles driven or flown)."
Strong demand in Asia was also reflected by a jump in
refining margins especially for diesel and jet fuel.
Overall Asian refining margins have not been doing well this
year, due to oversupply of products and the rising price of
crude, but diesel and jet fuel production profits have jumped.
For diesel, traders said a record heat-wave in south and
southeast Asia had pushed up fuel demand to operate air
conditioners, while jet fuel demand was soaring because of
Asia's booming air travel.
GRAPHIC: South Asia airlines to lead growth http://tmsnrt.rs/1qSJLXp
CHART: Asian refining margins http://reut.rs/22BhJgh
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