* Oil extends gain on Reuters report of surging China
exports
* Traders eye official China trade, industrial output data
* For a technical view, click: []
* Coming Up: EIA inventory report; 1430 GMT
(Adds reaction to Chinese exports, updates prices)
By Alejandro Barbajosa
SINGAPORE, June 9 (Reuters) - Oil rose 1 percent on
Wednesday for a third day of gains on news of strong overall
Chinese exports and after an industry report showed a
larger-than-expected decline in U.S. crude stocks.
Prices, which pared early gains, rebounded after Reuters
reported that China's exports grew "about 50 percent" in May
from a year earlier, accelerating from 30.5 percent in April,
in a sign that the economy of the world's second-largest oil
user is roaring ahead. []
China's key stock index <> pulled out of negative
territory to close up 2.8 percent following the report on the
trade data, which came ahead of Thursday's official release.
Adding to the picture of rising oil demand, U.S. crude
inventories fell 4.5 million barrels last week, the American
Petroleum Institute said on Tuesday after the close of trade,
more than four times as much as expected. []
U.S. crude for July delivery <CLc1> rose 69 cents to $72.68
a barrel at 0627 GMT, still down 17 percent from a 19-month
high above $87 in early May. July ICE Brent <LCOc1> was trading
almost at parity, up 36 cents at $72.66.
"The U.S. economy is certainly in recovery mode; oil
consumption seems to be recovering, with gasoline and
distillate fuel demand stronger," said David Moore, an analyst
at the Commonwealth Bank of Australia, adding that "the Chinese
data could be quite market moving."
The Energy Information Administration will publish more
closely watched government statistics on U.S. oil inventories
and demand on Wednesday at 1430 GMT.
The drop in U.S. crude inventories reported by the API was
matched by an equivalent increase in product supplies. Gasoline
stocks posted an unexpected increase of 1.5 million barrels and
distillates, including heating oil and diesel, logged a
larger-than-forecast gain of 3 million barrels.
ASIA STRENGTH OFFSETS EUROPE WEAKNESS
A report by Fitch Ratings that Britain faced a "formidable"
fiscal challenge pushed European stocks to near two-week
closing lows on Tuesday, while most Asian stocks also fell on
Wednesday. []
"The data flow is a little bit uneven and the market still
has a focus on developments in Europe. There is obviously
potential for fiscal difficulties," said Moore.
Adding to the uncertainty, U.S. Federal Reserve officials
on Tuesday gave conflicting signals on the direction of
interest rates, highlighting an increasingly important split
within the central bank. []
"Changes in market views about the economy will continue to
affect all risky markets, and commodities are no exception," JP
Morgan said in a report dated June 8.
For a graphic on the correlation between oil and equities:
http://graphics.thomsonreuters.com/gfx/NT_20100906115841.jpg
"The key driver however is the strength of developing
market oil demand, with diesel demand increasing in line with
the recovery in global trade," the bank said.
"Crude oil demand will increase sharply in the coming weeks
as Asian refineries ramp up throughput as seasonal maintenance
comes to an end."
Chinese trade data for May, including oil statistics, will
be published on Thursday, followed by industrial production for
the same month on Friday, with growth forecast at 17.1 percent
in a Reuters survey, down from a 17.8 percent gain in April.
(Editing by Michael Urquhart)
