* Oil prices rise but remain range-bound
* March-April U.S. crude futures spread strengthens
* World market to be over-supplied for some time -Goldman
(Adds settlement prices)
By Jessica Resnick-Ault
New York, Feb 9 Oil prices held onto gains on
Thursday with U.S. prices rising on evidence that gasoline
demand could strengthen in the world's biggest oil market,
although bloated crude supplies meant that fuel markets remain
Benchmark Brent crude settled up 51 cents at $55.63
per barrel. U.S. light crude settled 66 cents higher at
$53 a barrel.
"I think the market is frozen," said Dominick Chirichella,
senior partner at the Energy Management Institute.
He said that while the U.S. gasoline stock draw was
interesting, it was insufficient to knock the market out of its
range-bound trade, limited between production cuts from OPEC and
brimming U.S. crude stockpiles.
"If we continue to see a decent compliance level in the 85
to 95 percent range from OPEC, and we do see inventories
cleaning up in the U.S., we may get another leg up," Chirichella
The discount for March futures relative to April CLc1-CLc2
narrowed to 47 cents a barrel on Thursday, the strongest level
since October, as traders eyed growing exports and early
concerns of a pipeline outage drove the market higher.
Enbridge Inc's Flanagan South pipeline, which runs
from Flanagan, Illinois, to Cushing, Oklahoma, shut Wednesday,
stoking concerns of a larger outage. The pipeline, which has
nameplate capacity of 600,000 barrels per day (bpd), was ramping
back up around 350,000 bpd, sources said, citing energy
monitoring service Genscape.
The U.S. Energy Information Administration (EIA) said on
Wednesday gasoline inventories fell by 869,000
barrels last week to 256.2 million barrels, versus analyst
expectations for a 1.1 million-barrel gain.
The fall in gasoline stocks suggested U.S. consumption was
stronger than expected, and may be healthy enough to support
prices at time when most fuel oil markets are very well stocked.
"U.S. gasoline draws are supporting prices today," said
Tamas Varga, senior analyst at London brokerage PVM Oil
Associates. "They are an indication of stronger U.S. demand."
The EIA report also said U.S. commercial crude inventories
rose by 13.8 million barrels to 508.6 million barrels, well
above analysts' forecasts.
U.S. bank Goldman Sachs said high fuel inventories and
rising U.S. crude production meant oil markets would be
over-supplied for some time, but that they would drain
"We do not view the recent excess U.S. builds as derailing
our forecast for a gradual draw in inventories, with in fact the
rest of the world already showing signs of tightness," the bank
said in a note to clients.
High oil inventories have been undermining efforts by the
Organization of the Petroleum Exporting Countries and other
producers including Russia to tighten the market by cutting
(Reporting by Jessica Resnick-Ault; additional reporting by
Henning Gloystein in Singapore and Christopher Johnson in
London; Editing by Grant McCool and Lisa Shumaker)