* Asian shares on defensive as China fears rattle
* U.S. surprises oil market with sale from strategic reserve
* U.S. crude stockpiles rise much more than expected - EIA
* EU moves toward sanctions on Russians, Obama meets Ukraine
By Manash Goswami
SINGAPORE, March 13 Brent futures inched higher
on Thursday, holding above $108 a barrel, as investors focused
on risks from the unfolding crisis in Ukraine and as OPEC raised
its 2014 global oil demand growth forecast for a second straight
The U.S. oil benchmark plunged more than 2 percent overnight
in its biggest drop in two months after Washington announced a
surprise plan for a test release of strategic oil reserves,
while weekly data showed a big rise in crude stockpiles. Markets
are now awaiting economic data from China to gauge the health of
the world's second-biggest economy.
Brent crude rose 24 cents to $108.26 by 0203 GMT,
after ending 53 cents down to its lowest in a week. U.S. crude
gained 11 cents to $98.10, after settling $2.04 weaker at
$97.99, below the 50-day moving average of $98.32.
"We are seeing some snap back reaction because the market is
seeing the strategic sale as a one-off at this point, barring
any emergencies," said Ben Le Brun, a market analyst at
OptionsXpress in Sydney. "The long-term story for China is
intact because they have tools at their disposal to steer the
economy in case growth is lower than their expectation."
The sharp fall in the U.S. benchmark kept the price between
the two contracts wider than $10 a barrel. CL-LCO1=R
Oil, particularly Brent, is drawing support from the
unfolding crisis in Ukraine. The European Union agreed on a
framework on Wednesday for its first sanctions on Russia since
the Cold War, a stronger response to the Ukraine crisis than
many expected and a mark of solidarity with Washington in the
drive to make Moscow pay for seizing Crimea.
Also underpinning oil is expectation U.S. fourth-quarter
growth is likely to be revised higher after services industry
data suggested a much stronger pace of consumer spending than
the government had previously assumed.
"I am quite optimistic about the global economic recovery,
led by the United States," said Le Brun.
"That will support oil in the longer term given that the
United States is the biggest consumer."
World oil demand will increase more than expected in 2014,
OPEC said, raising its prediction for a second straight month as
economic growth picks up in Europe and the United States.
In a monthly report, the Organization of the Petroleum
Exporting Countries (OPEC) said global demand will rise by 1.14
million barrels per day (bpd) this year, up 50,000 bpd from its
Yet, further gains were capped by data from the U.S. Energy
Information Administration (EIA) that showed stockpiles of crude
rose 6.2 million barrels last week, in the biggest weekly
increase since the week ending Jan. 24, and much larger than the
2.2-million-barrel build analysts expected.
Inventories partly surged with refinery utilization rates
dropping 1.4 percentage points to 86 percent of capacity as
units shut for spring maintenance.
The United States announced a first test sale of crude from
its emergency oil stockpile since 1990. It is offering a modest
5 million barrels in what some observers saw as a subtle message
to Russia from the Obama administration.
(Reporting by Manash Goswami; Editing by Ed Davies)