By Reza Amanat Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Oil futures were steady Thursday as prices maintained some of the positive momentum from OPEC's surprise announcement late Wednesday that it had failed to reach consensus on boosting output and on a bigger-than-expected draw in U.S. oil inventories. At 1120 GMT, the front-month July Brent contract on London's ICE futures exchange was up 7 cents at $117.92 a barrel. The front-month July contract on the New York Mercantile Exchange was trading higher 79 cents or 0.8%, at $101.53 per barrel. "We are giving up some of yesterday's gains triggered by the inconclusive OPEC meeting. In the end, the fundamentals on the supply-side have not materially changed from what they were ahead of the meeting," said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas. Members of the Organization of Petroleum Exporting Countries failed to reach consensus on lifting output at the Vienna meeting Wednesday, in a move that surprised oil markets and pushed U.S. oil futures prices above the key $100 a barrel level. However, Saudi Arabia's Oil Minister Ali Naimi pledged after the meeting to keep the market supplied, despite the outcome of the meeting. A group of OPEC oil officials from the Gulf Cooperation Council states, led by the Saudis, had pushed hard for an actual increase in oil production of 1.5 million barrels a day, which would have brought OPEC's total production to 30.3 million barrels a day, or roughly a third of world supplies. But the plan was met with stiff resistance from six of the group's members, including price hawks Iran and Venezuela. "We were not surprised by the upward price reaction to the OPEC decision, but do not think this is a turning point for a sustained push higher," MF Global's senior commodity analyst Edward Meir said. "Demand is slowing down anyway, and in this regard, OPEC's hawks may be right in that the market may be somewhat over supplied for the moment," Meir said. Releasing more oil could result in a steeper price drop instead of a gentler slide lower if OPEC kept the status quo, he added. OPEC's own forecast shows the group's production will be 2 million barrels a day less than third quarter demand. However, not all of the group's members agreed with this forecast, with differing views over the strength of the world economy the main source disagreement, OPEC's Secretary General said Thursday. Separately, a much larger-than-expected decline in U.S. crude-oil inventories Wednesday also supported prices. Stockpiles fell 4.8 million barrels last week, the U.S. Department of Energy said. The data were expected to show a more modest 400,000-barrel decline, according to a Dow Jones survey of analysts. However oil product stockpiles rose more than expected--with gasoline stores building by 2.2 million barrels, while distillate inventories increased by 800,000 barrels--a fact that should have garnered more attention from market bears, analysts said. "The market is taking a second look at the U.S. data - though crude stocks fell, you are looking at decent gains in gasoline inventories and weakness in demand, notably in distillates, off nearly 5% on the year," Tchilinguirian said. The ICE's gasoil contract for June delivery was up $0.50 at $971 per metric ton, while Nymex gasoline for July delivery was up 48 points at $2.9835 per gallon. -By Reza Amanat, Dow Jones Newswires; 4420-7842-9487; reza.amanat@dowjones.com

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