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* U.S. Fed lowers volume on stimulus talk
* Saudi to maintain output level even if reserves tapped
* N. Sea platform problems, cargo delays curb Brent losses
* Coming up: EIA oil data 10:30 a.m. EDT Wednesday
By Robert Gibbons
NEW YORK, April 3 Oil fell on Tuesday as caution over lackluster demand growth and fading expectations for more monetary stimulus from the U.S. central bank countered concerns about potential supply disruptions.
Federal Reserve policymakers appear less inclined to launch a fresh round of monetary stimulus as the U.S. economy gradually improves, according to minutes for the central bank's March meeting.
Oil prices also felt pressure from news that, according to industry sources, Saudi Arabia is likely to maintain high oil production in the event consumer countries release strategic oil reserves, though the kingdom will not seek to attract buyers for more oil by discounting its crude.
Already weighing on U.S. crude was Monday's report from the Energy Information Administration showing U.S. oil demand in January fell 4.5 percent year-on-year, with January gasoline demand the weakest since 2001.
After both U.S. and Brent crude surged more than 2 percent in the previous session, Brent's losses were limited by delays to North Sea loadings and the tightening sanctions on Iran as its dispute with the West over its nuclear program continues.
Light trading volume for Brent and U.S. crude contributed to the choppy trading trajectory ahead of the long Easter holiday weekend, even as prices remained stubbornly range-bound.
"Essentially the market is continuing the pattern we saw last month, when it couldn't find a clear direction," said James Zhang, energy analyst at Standard Bank. "Few people are willing to aggressively short this market given the geopolitical risk."
Brent crude fell 57 cents to settle at $124.86 a barrel, having slumped to $124.30, just below its 30-day moving average of $124.36. The intraday peak was $125.97.
U.S. crude fell $1.22 to settle at $104.01 a barrel, having traded from $103.59 to $105.18.
Brent's premium to U.S. crude CL-LCO1=R strengthened to $20.85 based on settlements, reaching $20.99 intraday, the highest since October, Reuters data showed.
Total trading volumes for Brent slightly outpaced U.S. crude turnover. Brent dealings were 11 percent above the 30-day average, while U.S. volume lagged the 30-day average by 15 percent.
The dismal EIA demand data and weak crude prices did not prevent U.S. RBOB gasoline futures from continuing their seasonal rise and settling higher.
Gasoline has been supported by inventory drops as fuel with winter specifications is drawn down, while recently shut U.S. refineries and maintenance at others also provided support.
U.S. retail gasoline demand fell 0.7 percent last week versus the previous week and was down 3.5 percent compared to the year-ago period, MasterCard said in its weekly report.
"Today's dichotomy between RBOB strength and crude weakness appeared attributable to continued concerns over PADD 1 (U.S. Northeast) supply availability and some rumored refinery down time that had not been fully priced in," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.
PADD 1 gasoline stocks fell 1.8 million barrels in the week to March 23, according to the most recent EIA inventory report released last Wednesday.
U.S. OIL INVENTORIES
U.S. crude inventories rose 7.8 million barrels in the week to March 30, the industry group American Petroleum Institute said in a report released late on Tuesday, a much bigger increase than expected.
Gasoline stocks fell 4.5 million barrels, down 1.337 million in PADD 1, and distillate stocks fell 1.4 million barrels, the API said.
Ahead of weekly reports on U.S. oil inventories, crude oil stocks were expected to have risen last week by 2.2 million barrels, a Reuters poll of analysts showed.
Gasoline stockpiles were expected to be down 1.4 million barrels and distillate stocks were estimated to be down 400,000 barrels, the survey showed.
The U.S. government's report from the EIA is slated for release on Wednesday at 10:30 a.m. EDT (1430 GMT).
NORTH SEA CARGO DELAYS
Tightening sanctions on Iran's crude oil exports and the scramble by consuming nations to find alternative supplies were not the only supply problem limiting oil's losses.
At least seven cargoes of North Sea Forties crude loading in April have been delayed and three canceled, trading sources said, following production problems including the shutdown of Total's Elgin platform because of a gas leak.
BP Plc's Valhall platform in the Norwegian North Sea, shut last week for unplanned maintenance, produces oil flowing into the Ekofisk production stream. The Valhall shutdown has led to delays to seven Ekofisk shipments, according to traders. (Additional reporting by Claire Milhench in London and Francis Kan in Singapore; Editing by David Gregorio, Dale Hudson and Jim Marshall)