Oil was steady on Thursday, with the front-month US contract holding above $75, as rising stock markets in Asia reflected greater confidence that the eurozone will contain Greece's debt crisis.

Spain outlined measures to cut its deficit on Wednesday, including pay and job cuts in the public sector, helping boost Japan's Nikkei equity index by 1.5 per cent on Thursday, led by shares of information services company CSK Holdings.

Optimism across financial markets and a slighthly weaker dollar offset pressure on oil prices from record crude inventories at the Cushing, Oklahoma pricing point for US oil benchmark West Texas Intermediate.

US crude for June delivery shed 10 cents to $75.55 a barrel at 0257 GMT, but the July contract gained 15 cents to $80.30 and front-month ICE Brent rose 12 cents to $81.32.

'This market is well supported above $75 because of developments in financial markets,' said Ken Hasegawa, a commodity derivatives manager at brokerage Newedge in Japan.

'We see some increases in the stock markets in Asia and that helps to lift prices to the upside despite high inventories in the US, especially in Cushing.'

Total crude inventories in top consumer the United States rose slightly more than forecast last week on lower crude runs by refiners curtailing operations, adding 1.9 million barrels, government statistics from the Energy Information Administration showed on Wednesday.

Stockpiles Cushing extended record-high levels after an increase of 800,000 barrels sent supplies to 37 million barrels last week. Capacity at Cushing is currently at least 53 million barrels, according to Reuters estimates.

Inventories of distillate fuels including heating oil and diesel gained 1.4 million barrels. But gasoline stockpiles unexpectedly fell by 2.8 million barrels.

This helped prices rebound from Wednesday's lows, when prices dipped close to last Friday's 12-week low of $74.51 as the European crisis roiled financial markets. That came just four days after prices touched $87.15, the highest in almost 19 months.

'It's mid-term expectations that have kept prices in a range between $75 and $85,' Hasegawa said. 'The July WTI contract is around $80, just at the centre level of that range, which is very good for both producing and consuming countries.'

The widening discount for front-month WTI crude futures to second-month barrels traded on the New York Mercantile Exchange, at its highest level since February 2009 on Wednesday, prompted concerns of a return of the 'supercontangos' seen in early 2009 when the spread topped $8 a barrel.

Crude futures for June delivery traded at a discount of close to $5 a barrel to July crude at some points during Wednesday's trading session. Cushing stockpiles rose for an eighth consecutive week.

Storage utilisation rates were at about 70 per cent in the week through May 7, using Reuters capacity estimates. Cushing tanks can typically only hold 80 to 90 per cent of their total capacity, experts say, due to safety and blending requirements. – Reuters