U.S. crude oil keeps strength near $126 on Iran

(To see the day's top energy news click [TOP/O])

TOKYO, May 14 (Reuters) - U.S. crude oil futures maintained
strength to hold near $126 per barrel on Wednesday after they
rallied the previous day on a report Iran said it was mulling a
proposal to cut production.

* By 0008 GMT, front-month U.S. crude for June delivery
CLc1 was trading up 14 cents, or 0.11 percent, at $125.94 a
barrel on the Globex electronic trading platform.

It settled up $1.57, or 1.26 percent, at $125.80 on Tuesday,
when it hit a fresh all-time intraday high of $126.98.

* Oil prices regained strength on Tuesday after a report that
Iranian President Mahmoud Ahmadinejad said a proposal to reduce
the country's crude output was being reviewed by experts.
[ID:nDAH355067]

* "The upward trend is still alive. The news about Iran is
creating uncertainties and should keep crude oil prices buoyant,"
said Shuji Sugata, manager Mitsubishi Corp Futures and Securities
Ltd in Tokyo.

"But we have to watch the outcome of U.S. oil inventory data
to determine the near-term trend as both crude and oil products
stocks are expected to rise."

* The U.S. government's oil inventory report is due later in
the day with a preliminary Reuters poll of analysts forecasting a
rise in crude oil and product supplies last week. [EIA/S]

* The U.S. Senate gave a veto-proof majority to a proposal to
suspend deliveries to the Strategic Petroleum Reserve until crude
oil prices fall below $75 a barrel. [ID:nN13313127]

*A hydrocracker at the Grangemouth refinery in Scotland will
remain shut for a few weeks to repair fire damage, a source said
on Monday.
To read the previous day's closing market report, click [O/R]
Diary of upcoming energy news and events -- [O/DIARY]
(Reporting by Chikafumi Hodo)