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Oil steady above $110; China supports

Oil steadied above $110 a barrel as firm Chinese demand and OPEC's stance on keeping its supplies unchanged lent support.

Prices gained even though the International Energy Agency on Friday cut its forecast of world oil demand growth due to the economic slowdown in the United States and other industrialized countries.

US light crude for May delivery was trading 49 cents up at $110.60 a barrel.

US crude hit a record high of $112.21 a barrel on Wednesday, after the US government data showed a surprise drop in crude oil and fuel supplies. It has gained about 14% this year.

London Brent crude gained 72 cents to $108.80.

“It is a continuation of the price volatility and there is a lack of initiative on OPEC to bring on more oil,” said Gerard Burg, a resource analyst from National Bank of Australia.

March crude oil imports into China leapt by a quarter from a year ago to a record high of 17.3 million tons.

On Thursday, Ali al-Naimi, oil minister for top OPEC producer Saudi Arabia shrugged off calls from consumer nations to boost production, saying that supplies were adequate and record prices were not due to a lack of oil.

Saudi Arabia's customers on Friday confirmed Saudi May supply volumes to Asia and Europe would be unchanged from April, while one customer said it would get a little more oil.

The cartel will attend an industry gathering in Rome later this month, but is not expected to call a meeting there to review output policy.

The IEA, adviser to industrialized countries, said on Friday world oil demand would rise less than expected in 2008 because of slower economic growth.

Global consumption will rise by 1.27 million barrels per day (bpd), 460,000 bpd less than the previous forecast, the organization said in its monthly Oil Market Report. (Reuters)