Oil holds at $ 55, US strategic stockbuild supports

SINGAPORE, Jan 25 (Reuters) Oil held over a barrel on Thursday, as technical buying and plans to increase emergency U.S. stockpiles offset builds in crude and distillate fuel inventories in the world's top consumer.

U.S. light crude for March delivery was down 23 cents at .14 a barrel by 0417 GMT, having gained 33 cents on Wednesday. London Brent crude was down 8 cents to .35.

The market held its ground despite U.S. government data on Wednesday that showed a rise in crude inventories and higher U.S.

distillates stockpiles, countering expectations a cold snap in the U.S. Northeast had started eating into stocks.

''The stats were not that bullish and yet the market rallied. The technical picture is supportive. Prices collapsed and recovered twice -- it look like there is now more upside than downside,'' said Tony Nunan, manager at Tokyo-based Mitsubishi Corp.'s risk management unit.

Supplies of distillates, which include heating oil, grew by 700,000 barrels in the week ended Jan. 19, contrary to analyst forecasts of a drop of about 800,000 barrels, the Energy Information Administration said in its weekly report. S]Over the last four weeks, distillate demand has averaged almost 4.1 million barrels per day, about 4.1 percent below last year's demand, amid mild winter temperatures.

Gasoline stocks also rose more than expected, rising 4.0 million barrels to boost a year-on-year surplus, while crude stocks increased by 700,000 barrels to leave them in the upper end of the average range.

Oil prices slid after the release of the data, but recovered to add to Tuesday's SINGAPORE, Jan 25 (Reuters) Oil held over $55 a barrel on Thursday, as technical buying and plans to increase emergency U.S. stockpiles offset builds in crude and distillate fuel inventories in the world's top consumer.

U.S. light crude for March delivery was down 23 cents at $55.14 a barrel by 0417 GMT, having gained 33 cents on Wednesday. London Brent crude was down 8 cents to $55.35.

The market held its ground despite U.S. government data on Wednesday that showed a rise in crude inventories and higher U.S.

distillates stockpiles, countering expectations a cold snap in the U.S. Northeast had started eating into stocks.

''The stats were not that bullish and yet the market rallied. The technical picture is supportive. Prices collapsed and recovered twice -- it look like there is now more upside than downside,'' said Tony Nunan, manager at Tokyo-based Mitsubishi Corp.'s risk management unit.

Supplies of distillates, which include heating oil, grew by 700,000 barrels in the week ended Jan. 19, contrary to analyst forecasts of a drop of about 800,000 barrels, the Energy Information Administration said in its weekly report. S]Over the last four weeks, distillate demand has averaged almost 4.1 million barrels per day, about 4.1 percent below last year's demand, amid mild winter temperatures.

Gasoline stocks also rose more than expected, rising 4.0 million barrels to boost a year-on-year surplus, while crude stocks increased by 700,000 barrels to leave them in the upper end of the average range.

Oil prices slid after the release of the data, but recovered to add to Tuesday's $2.46 gain that was triggered by U.S. plans to ramp up the country's strategic oil reserves by 11 million barrels this spring.

''Having rather cast off developments over recent weeks that are more immediately supportive for prices, the response to the SPR announcement is significant in its implication that longs are now entering the market with a bit more confidence,'' said Barclays Capital.

However, U.S. energy department officials said on Wednesday the purchase could be delayed if prices are high.

Expectations of continued cold weather in the U.S. Northeast are also supporting prices. DTN Meteorlogix on Wednesday forecast temperatures to average below normal in the next six to ten days.

Kuwait's oil minister said on Wednesday he did not expect OPEC to cut supply further at its next scheduled meeting on March 15 because existing curbs are enough to bolster prices.

The comments added to signs that OPEC, source of more than a third of the world's oil, is holding its nerve after a drop in oil prices this year prompted some calls within the group for further supply cutbacks.

REUTERS PV DB1335 .46 gain that was triggered by U.S. plans to ramp up the country's strategic oil reserves by 11 million barrels this spring.

''Having rather cast off developments over recent weeks that are more immediately supportive for prices, the response to the SPR announcement is significant in its implication that longs are now entering the market with a bit more confidence,'' said Barclays Capital.

However, U.S. energy department officials said on Wednesday the purchase could be delayed if prices are high.

Expectations of continued cold weather in the U.S. Northeast are also supporting prices. DTN Meteorlogix on Wednesday forecast temperatures to average below normal in the next six to ten days.

Kuwait's oil minister said on Wednesday he did not expect OPEC to cut supply further at its next scheduled meeting on March 15 because existing curbs are enough to bolster prices.

The comments added to signs that OPEC, source of more than a third of the world's oil, is holding its nerve after a drop in oil prices this year prompted some calls within the group for further supply cutbacks.

REUTERS PV DB1335