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Oil prices steady after turbulent week

LONDON: World crude oil prices were little changed on Friday as traders took stock of the market after a week of turbulent price swings.

June London futures for bellwether Brent blend crude closed down four cents at $19.82 a barrel, having swung in a wide $2.50 range this week. Brent has fallen sharply since touching a five-year high of $23.30 in early April and the outlook was very uncertain, dealers said.

"It's taking a rest. People are taking some time to assess supply and demand and look at which way the market's going next," said an oil futures broker.

Underpinning the crude market was gasoline in New York which surged to a post-Gulf War high on Friday, prompting calls for an inquiry into the rise.

Americans are particularly sensitive to gasoline price rises ahead of the summer holiday "driving season" which is about to get underway.

Forecasts of record U.S. gasoline imports this summer have lit a fire under the futures market and prices for May delivery hit a post-Gulf War high of 77.00 cents per gallon on Friday.

A White House spokesman told reporters that the rise was attributable to "spot market speculation" and expected prices to ease in the coming months.

But market analysts in the U.S. said the oil companies' strategy of keeping low inventories might be the real reason behind the rally, and they saw further gains on the horizon.

On the other hand, dealers say oversupply in key Atlantic Basin markets is pressing down on the crude price.

Slack refining demand in Europe over the past two weeks has reduced sharply the premiums refiners were paying to secure oil and some technical analysts now believe Brent may be on the threshold of a downtrend.

"It's going to keep us in what appears to be the development of a bearish downtrend," said analyst Tom James at Eurobrokers.

"The crude markets may be in the throes of a correction," said brokers GNI in a daily report. "For the bulls, the low overall level of stocks and the gasoline scenario are constructive."

Still on traders' minds is a resumption in early May of U.N.-Iraqi oil talks which finished a third round of discussions on Wednesday without agreement.-Reuter