* Oil steady after 2 pct climb in previous session
* Strong U.S industrial data seen lending support
* Demand fundamentals weak, unlikely to lift oil beyond
$75
(Updates prices)
By Sambit Mohanty
SINGAPORE, Sept 17 (Reuters) - Oil was steady above $72 a
barrel on Thursday, taking a breather after a rise of more than
2 percent a day earlier, following a larger-than-expected fall
in U.S. crude oil inventories.
The stock decline, pegged to slowing imports, came a day
after data from the American Petroleum Institute showed a sharp
build up in gasoline and distillate stocks -- a combination
that analysts say could hurt the profitability of U.S. oil
refiners.
"I am bullish on oil in the long term, because this
combination will pressure margins that will prompt run cuts and
eventually pull down product inventories," said Tony Nunan,
risk manager at Mitsubishi Corp in Tokyo.
As U.S. industrial production rose for a second straight
month in August, reinforcing views the nation's recession had
ended, energy analysts said that investors' appetite for
riskier assets was growing, which would eventually support oil.
NYMEX crude for October delivery <CLc1> was was up 5 cents
at $72.56 a barrel by 0636 GMT, after settling up $1.58 on
Wednesday, when prices also got support from a weak U.S.
dollar. ICE Brent <LCOc1> was down 7 cents at $71.60.
Oil has more than doubled from this year's low of $32.70
hit on January 20 and is trading 51 percent below a record high
of more than $147 struck in July 2008. The market this year hit
a high of $75 on August 25.
The Energy Information Administration said on Wednesday
U.S. crude stocks fell 4.7 million barrels last week, far more
than the forecast for a 2.4 million decline in a Reuters poll.
[]
On Tuesday, the American Petroleum Institute had said crude
stocks rose by 631,000 barrels last week, while distillate
stocks, which include heating oil and diesel fuel, jumped by
5.2 million barrels, against a forecast rise of 1.3 million.
Analysts said although there were no strong fundamental
factors to lift oil above this year's high of $75 in the short
term, a weakening dollar, buoyant stock markets and positive
growth data from the United States would stem a big price
slide.
"Oil inventories are too high and demand is not too great.
But we should remember that there is a big loss of confidence
in the dollar and that will lend some support to oil," Nunan
added.
After hitting one-year lows a day earlier, the U.S. dollar
stayed on the defensive on Thursday, as investors added long
positions in commodity currencies. []
Commodities and equities also gained after U.S. industrial
production rose a robust 0.8 percent in August, boosting
sentiment towards riskier assets.
Asian stocks hit their highest level in 13 months on
Thursday and the Australian dollar surged after U.S. economic
data raised hopes that the global economic recovery was
strengthening.
A weaker dollar can help fuel purchases of oil and other
dollar-denominated commodities as they become relatively less
expensive for non-dollar holding investors.
The Organization of the Petroleum Exporting Countries might
need to cut its oil supply next year to match an expected fall
in demand for the group's crude, aAn OPEC delegate wrote in a
Kuwaiti newspaper on Wednesday. []
(Editing by Clarence Fernandez)
