* Oil recoups losses from 5 days of falls, firm dlr weighs
* API data shows surprise decrease in U.S. crude stocks
* Eyes on refinery utilisation, fuel demand
SINGAPORE, Dec 9 (Reuters) - Oil moved up above $73 a
barrel on Wednesday, after falling more than $1 the previous
day, supported by industry data showing an unexpectedly large
drop in U.S. crude stocks, but gains were curbed by the steady
dollar.
Crude inventories in the world's largest oil consumer fell
5.8 million barrels last week, bucking expectations for an
increase, as refiners boosted fuel production, the American
Petroleum Institute (API) said.
U.S. crude for January delivery <CLc1> rose 50 cents to
$73.12 a barrel by 0258 GMT, after falling by $1.31 on Tuesday.
NYMEX crude hit its lowest level since late November at $72.43
in the previous session, and has lost 7.3 percent since prices
last rose on Dec. 1.
London Brent crude <LCOc1> edged up 26 cents to $75.45.
The last five days' losses are the biggest since prices
fell 7.9 percent on Sept. 23 and Sept. 24, partly driven down
by the recovery in the dollar.
"The draw in crude stocks is huge, even though oil imports
have been rising," said Tetsu Emori, a fund manager at
Tokyo-based Astmax Co Ltd.
"Refining rates were up 1.3 percentage points and we could
be seeing the first signs of a recovery in fuel demand in the
United States," he said, adding that some support may come from
the products side as refinery margins may be improving as crude
prices weaken.
API data also showed gasoline inventories fell 753,000
barrels, while distillates, which include heating oil and
diesel, rose 1 million barrels. []
OVERALL STOCKS STILL HIGH
However, crude stocks at Cushing, Oklahoma, the delivery
point for crude traded on NYMEX, rose 1.5 million barrels,
rising steadily for several weeks and helping to push down the
price of front-month crude futures and creating the deepest
front-month contango discounts since August.
Despite hopes of emerging recovery in oil consumption,
crude continued to be under strain as the EIA revised downwards
its forecast for 2010 global demand growth. []
Further pointers on U.S. stockpiles will come from the
weekly Energy Information Administration (EIA) data due later
on Wednesday, with an expanded Reuters poll calling for a
600,000-barrel rise in crude stocks.
Distillates stockpiles are expected to have fallen by
600,000 barrels, with demand up for heating oil due to colder
weather in the U.S. Northeast, a major market for winter
heating oil, while gasoline was expected to have risen by 1.5
million barrels.
Oil has surged to a high for the year of $82 a barrel in
October, from below $33 last December, and Wednesday's price
rebound was limited by the recovering U.S. currency.
The dollar index hit a one-month high of 76.331 <.DXY>
<=USD> in early Asian trade before easing back by 0.2 percent,
and the euro fell to a one-month low versus the greenback, as
investors sold positions in riskier assets ahead of the
year-end, partly due to rising debt problems for Greece and
Dubai.
The firm U.S currency makes dollar-denominated commodities
more expensive for holders of other units, and also pressured
gold, which made some gains on Wednesday but hovered near
three-week lows, while Asian equities fell on fears over the
spluttering economic recovery. [] []
For a graphic showing the correlation between oil and the
dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
(Reporting by Ramthan Hussain; Editing by Clarence Fernandez)
