Oil prices stabilize after 6 percent fall since late April

By Henning Gloystein
SINGAPORE, May 4 (Reuters) - Oil prices stabilized on
Wednesday after falling for two straight days on concerns that
slowing demand and rising Middle East production would extend a
global supply overhang.
International Brent crude futures LCOc1 were trading at
$45.10 per barrel at 0140 GMT, up 13 cents, or 0.3 percent, from
their last settlement. Brent has fallen more than 6 percent
since April 29.
U.S. West Texas Intermediate (WTI) futures were up 8 cents,
or 0.2 percent, at $43.73 a barrel.
The slight price increases followed a more than 6 percent
fall since the end of April that was triggered by rising output
from the Middle East and renewed signs of economic slowdown in
Asia.
"Asia's big markets continue to disappoint: Japan sank
further, China relapsed, and India slipped," said Frederic
Neumann of HSBC in Hong Kong, adding that exports were "stuck
below the waterline" and "local demand looks wobbly, too."
In the United States, the picture was less clear.
U.S. production has fallen from a peak of over 9.6 million
barrels per day (bpd) in summer last year to just over 8.9
million bpd currently.
However, the country's crude inventories rose by 1.3 million
barrels in the week to April 29 to 539.7 million barrels,
according to data from the American Petroleum Institute, enough
to meet global demand for almost a week.
Still, strong demand for refined products reduced stockpiles
of gasoline, diesel and heating oil.
Thanks to ongoing strong demand and further expectations of
U.S. production cuts, BMI Research said on Wednesday that oil
prices would likely rise in the short-term.
"We anticipate a strong pullback in non-OPEC supplies. We
also expect some support from the U.S. (summer) driving season.
Bloated crude stocks will thus unwind in the coming months," BMI
said.
"We believe prices will strengthen above $50 per barrel,
trading in a range of $50-$60 per barrel until the end of the
year," it added.