By Manash Goswami
SINGAPORE, May 14 (Reuters) - Brent futures held steady near $103 a barrel on Tuesday, caught between hopes of a revival in demand growth after an unexpected jump in U.S. retail sales and concerns about rising stockpiles in the world's largest oil consumer.
The retail sales figures added to recent data pointing to underlying strength in the world's biggest economy, boosting risk assets such as Asian shares, but investors remain nervous about oil demand from the United States and China amid slowing consumption in Europe.
'We are not 100 percent sure that the United States is on a path towards steady recovery because data is conflicting,' said Yusuke Seta, a commodity sales manager at Newedge Japan.
'On top of that, China is not looking good and Europe is not looking good. All this is keeping prices in check,' said Seta, who expects to see Brent between $102 and $105 a barrel over the next few days and U.S. oil between $93 and $97 a barrel.
By 0638 GMT, Brent gained 11 cents to $102.93 a barrel, after settling down $1.09. U.S. oil gained 40 cents to $95.57, after ending 87 cents lower. Both contracts fell the most in nearly two weeks in the previous session.
'Crude oil prices fell on Monday, as US headline retail sales beat expectations, but showed the largest drop in US retail gasoline sales in over 4 years,' ANZ analysts said in a report. 'This proved a double-whammy for oil prices, as the better-than-expected retail sales numbers also provided a boost for the dollar.'
A firm dollar makes commodities priced in the greenback more expensive for holders of other currencies.
The hope of a U.S. recovery is causing the U.S. benchmark to rise faster than Brent. Goldman Sachs expects the Brent-WTI crude spread to drop to $5 a barrel in third quarter of 2013 with the supply balance at the West Texas Intermediate delivery point of Cushing, Oklahoma already in deficit.
North Sea Brent held a near $20 premium for much of 2012 over WTI, but the spread has fallen to less than $8 with the completion of pipeline projects such as the Permian Express, Longhorn and West Texas Gulf Expansion.
U.S. commercial crude oil stockpiles were seen slightly higher last week after hitting record high inventories over the prior two weeks while gasoline inventories were seen lower, a preliminary Reuters poll of eight analysts showed.
The survey, ahead of weekly inventory reports from the American Petroleum Institute and the U.S. Department of Energy's Energy Information Administration, forecast crude stocks to rise 200,000 barrels on average.
Brent is expected to rise to $103.77 before dropping towards $101.35, while U.S. oil may revisit its May 10 high of $96.24, Reuters technical analyst Wang Tao says.
(Editing by Clarence Fernandez and Himani Sarkar) Keywords: MARKETS OIL/
(Manash.Goswami@thomsonreuters.com)(+65-68703887)(Reuters Messaging: email@example.com)
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