Brent crude steady at US$120

Brent crude held at US$120 on Wednesday, after posting steep losses in the previous session, as a cut in global oil consumption forecast by the EIA and an unexpected surge in U.S. crude stocks reinforced fears demand growth may slow. The cut by the US Energy Information Administration (EIA) followed weak economic numbers from the two top oil consumers - China and the United States - suggesting the global economy may be in more trouble than it appeared. These factors overshadowed concerns of supply disruption from the Middle East. Brent traded 15 cents higher at US$120.03 a barrel by 0302 GMT, after settling US$2.79 lower at its weakest since February 17. The 2.27 percent slide was the biggest one-day percentage loss since December 14. US oil slipped 10 cents to US$100.92 a barrel, after settling down US$1.44 at US$101.02, the lowest since February 14 and below its 100-day moving average of US$101.65. "The broader markets, including oil, are on risk-off mode at this point because of the series of negative numbers we have seen recently," said Natalie Robertson, an analyst at ANZ. "Oil markets would be flat to lower over the next few days, with support coming in if there are worries on the supply side." Asian shares fell for a third day, while the dollar declined to a five-week low against the yen and the euro inched lower due to the uncertainty surrounding global growth. Shanghai copper fell more than 2 percent to three-month lows, tracking sharp losses in London. Oil is also under pressure after the American Petroleum Institute (API) showed crude stocks rose 6.6m barrels, three-fold more than a forecast of 2.1m barrels in a poll by Reuters. This week's crude-stocks rise followed the largest two-week build in the past 11 years reported by the US Energy Information Administration (EIA) last week. "While it is not unusual to see a build in crude stocks at this point because demand usually falls with many refineries doing maintenance, it is still weighing on sentiment," Robertson said. Brent could fall further to US$117.80 per barrel, as indicated by its wave pattern and a Fibonacci projection analysis, while US oil is expected to clear a support at US$100.81 per barrel and fall more to US$99.37, according to Reuters technical analyst Wang Tao. Oil is also under pressure as concerns about European debt have resurfaced as investors worry Spain could become the next source of contagion in the euro zone due to its weak fiscal position. Spain's banks may need more capital if the economy deteriorates, the head of the central bank said. The EIA forecast global oil consumption to average 88.81m barrels per day in 2012, compared with last month's projection of 88.96m bpd. The EIA expects oil markets to weaken this year as a result, even though exports from Iran fall as the US and Europe tighten sanctions on the Islamic Republic to force it to abandon its nuclear programme. Iran's oil production may fall 15 percent this year due to reduced foreign investment, it said. Iran has agreed to renew discussions with the permanent members of the UN Security Council - the US, Russia, China, Britain and France - plus Germany last month, more than a year after previous talks failed. The next round would be in Baghdad following this week's negotiations in Istanbul. Even before the talks begin, Iran said it cut oil exports to Spain and may halt sales to Germany and Italy, according to its English-language state television. The announcement may have been aimed at strengthening its position ahead of the talks. But, in an indication that Tehran's "counter-sanctions" were of little impact, Spain's biggest refiner said it had already replaced Iranian crude with Saudi Arabian oil months ago.