By Jessica Jaganathan
SINGAPORE (Reuters) - Brent crude rebounded above $100 per barrel on Wednesday as a steep drop over the past five sessions attracted bargain hunters, while hopes the U.S. Federal Reserve will maintain its monetary stimulus after recent weak data also supported prices.
But concerns about oil demand growth stemming from bleak economic reports from the world's top oil consumers the United States and China, which pushed Brent to below $100 for the first time since July in the previous session, capped gains.
Brent crude for June delivery gained 33 cents to $100.24 a barrel by 0515 GMT, after dropping to a session low of $98 on Tuesday, the weakest since July 2012.
U.S. crude for May delivery slipped 3 cents to $88.69 a barrel, off a 4-month low of $86.06 hit on Tuesday.
"I think at this stage we are seeing a bit of bargain hunting," said Ben Le Brun, analyst at OptionsXpress in Sydney.
"But oil prices are going to be dictated by economic data that we see coming out of the U.S. and obviously the (Federal Reserve) quantitative easing program is still in place so that should at least underpin some support for commodity prices."
He added that broader concerns on the state of the global economy remained in the market, capping oil price gains.
U.S. consumer prices fell in March for the first time in four months and factory output slipped, strengthening the argument for the Federal Reserve to maintain its monetary stimulus to speed up economic growth.
A rise in U.S. March housing starts to the highest since 2008 was a bright spot, but insufficient to turn oil sentiment bullish.
The International Monetary Fund on Tuesday trimmed projections for global economic growth for this year and next to take into account sharp government spending cuts in the United States and the latest struggles of recession-stricken Europe.
While it said economic prospects had improved in recent months with a fading of financial risks, it warned Europe against relaxing efforts to combat its debt crisis given the messy bailout in Cyprus and a political stalemate in Italy.
Brent crude shed almost 6 percent over the past five sessions -- biggest 5-day drop since September last year -- in a wider commodities rout after data showed economic growth in China, the world's second-largest oil consumer, had slowed unexpectedly in the first three months of 2013.
Gold and other metals, including copper, later bounced back.
While further weakness in Brent crude prices in the near term is not ruled out, oil prices will unlikely fall below the $100 a barrel mark past the second quarter, Barclays said in a note on Tuesday.
"Progressing through the tail end of Q2 and into the second half of 2013, we see strong indications for demand growth developing which will keep the call on crude elevated."
A pick-up in hedging activity from consumers who have been waiting on the sidelines for better entry points for their hedging programmes could help support prices, Barclays added.
"The second layer of support is likely to come through market expectations surrounding comfort levels for OPEC producers to continue producing above their target, below the $100/bbl, which they have lately mentioned as appropriate for both consumers and producers," it said.
Oil prices could also be bolstered late in the second quarter once refineries are back from maintenance and as geopolitical risks still remain, the analyst added.
Societe Generale said it was keeping its Brent forecast for the second half of the year at $112-113 a barrel, adding that the recent weakness in oil prices was seasonal and temporary.
Prices should trend sideways to lower for another month or so, before starting to recover in May, SocGen analyst Michael Wittner said in a note on Tuesday.
U.S. INVENTORY
Data from the American Petroleum Institute (API) showed total weekly U.S. crude stocks dropped by 6.7 million barrels, in contrast to a Reuters survey in which analysts forecast a rise of 1.3 million.
Brent crude and U.S. crude prices moved higher in post-settlement trading after the report was released.
The more closely watched data from the U.S. government agency, the Energy Information Administration, will be released Wednesday at 10:30 a.m. EDT (1430 GMT).
(Editing by Himani Sarkar)
