* Wall Street and European shares rebound
* Above-forecast euro zone services PMI lifts euroŸ
* Brent's premium to US crude hits widest in 2013
(Updates with API data paragraphs 11-15)
By Gabriel Debenedetti
NEW YORK, Feb 5 Brent crude rose on Tuesday,
hitting a 20-week high as positive economic data and strong
corporate earnings reports lifted Wall Street stocks and other
U.S. crude rose more modestly, constrained by worries about
surplus supplies at Cushing, Oklahoma. Brent's premium over U.S.
crude widened, at one point hitting the biggest spread this
Financial markets got a lift from purchasing managers'
indices in Europe and data on the U.S. services sector.
Also, stronger-than-expected earnings lifted the
Dow Jones industrial average above 14,000, a day after the
market's biggest sell-off since November. The S&P 500 and Nasdaq
stock indexes each gained more than 1 percent.
"The S&P 500 has recovered its confidence and there's
support for oil prices related to that," said Timothy Evans,
energy analyst for Citi Futures Perspective in New York.
Brent's premium to U.S. crude CL-LCO1=R increased to
$20.34, the widest this year and just short of the 100-day
moving average. The spread settled at $19.88, 45 cents wider
than Monday's close.
Expectations that stocks at the Cushing, Oklahoma, delivery
point for the U.S. contract may keep rising are weighing on the
U.S. benchmark, traders have said.
Brent crude settled up 92 cents a barrel at $116.52
in volatile trade. During the session, it fell as low as $115.01
and climbed as high as $117.23, its highest point since
mid-September. Brent is up more than 5 percent in 2013.
U.S. crude added 47 cents to $96.64.
Supply of the four North Sea crude oil grades that underpin
the Brent futures contract is expected to fall in March,
according to loading schedules, supporting Brent prices.
Traders were also eyeing news Magellan Midstream Partners
LP's reversed Longhorn Pipeline would begin filling with
crude in mid-March and reach its 225,000-barrel-per-day capacity
in the third quarter. The line will deliver crude from West
Texas to the Gulf Coast refining center.
U.S. OIL INVENTORIES
U.S. crude stocks rose 3.6 million barrels last week, the
American Petroleum Institute (API) reported on Tuesday.
Crude stocks at Cushing dropped 24,000 barrels, while
gasoline stocks rose 1.6 million barrels and distillate stocks
were off 1.4 million barrels, the API said.
Analysts had expected U.S. crude stocks to rise 2.8 million
barrels, according to a Reuters survey of analysts taken ahead
of weekly inventory reports from API and the U.S. Energy
Information Administration (EIA).
Gasoline stocks were not expected to change and distillate
stocks were expected to fall 1.0 million barrels.
The EIA weekly inventory report is due on Wednesday at 10:30
a.m. EST (1530 GMT).
(Additional reporting by Alex Lawler in London and Ramya
Venugopal in Singapore; editing by James Jukwey, Andrew Hay and