Brent oil slips

Brent crude oil slipped below $104 a barrel on Wednesday as US crude prices remained steady, further widening the spread between the two grades of crude. The spread between the front-month Brent crude oil contract and US crude oil futures narrowed to a low of $7.76, the smallest gap between the two since late December 2011. Brent settled at $104.34 a barrel, down 6 cents after trading as high as $104.80 per barrel. US oil settled at $96.62 a barrel, up $1.00.
Earlier, Brent slipped 50 cents to $103.90 a barrel by 12:30 pm EDT (1630 GMT), after trading as high as $104.80 per barrel. US oil was trading 31 cents higher at $95.93 at 12:38 pm EDT. Data from the US Energy Information Administration (EIA) showed crude stocks rose last week to a new record high at 395.5 million barrels. US crude was mildly sustained by some positive economic data. German industrial output unexpectedly rose 1.2 percent on the month in March, contrasting with recent gloomier data.
"Overall, the fundamental picture remains weak," said Gene McGillian, an analyst with Tradition Energy in Stamford, Conn. "We're at multi-decade highs in crude stockpiles, multi-decade highs in US production and that's causing some resistance. As the market tries to push higher, that resistance is going to get stronger." China's daily crude imports in April rose 3.7 percent from a year ago and 3.5 percent from March, customs data showed, as refiners in the world's No 2 consumer took advantage of lower prices to replenish stocks.
German industrial output unexpectedly rose 1.2 percent on the month in March, contrasting with recent gloomier data. The Chinese and German figures boosted world shares and other commodities, despite doubts about the quality of the numbers from China. The increase in US crude stocks came below forecasts in a Reuters survey of analysts but still underscored the ample supply levels.
"Even with the news from China and Germany, the background is still pretty weak on the oil side as the market is well supplied and we are still in a seasonal demand low," said Simon Wardell, an analyst at Global Insight. Prices may stay under pressure, given projections of a well supplied market and bleak global demand. The EIA cut its forecast for demand growth for this year to 890,000 barrels per day (bpd) and pared its 2014 estimate to 1.21 million bpd, or just over 2.1 million bpd demand growth over two years.
At the same time, it estimated that supplies from countries outside the Organisation of the Petroleum Exporting Countries would grow by 1.11 million bpd in 2013 and by a further 1.77 million next year. In the near term, data from the American Petroleum Institute showed US crude inventories rose 680,000 barrels for the week to May 3, falling short of a Reuters poll forecast of an average increase of 1.9 million barrels. Concerns that Syria's civil war could deteriorate further eased after Russia and the United States announced plans to convene international talks to end the strife.