* Chinese crude imports fall below 4 million bpd in October
* Dollar index <.DXY> rises for fourth consecutive day
* API says U.S. crude inventories fall 7.4 million barrels
* Coming Up: U.S. EIA oil inventory report at 1530 GMT
(Updates detail, comment, prices)
By Christopher Johnson
LONDON, Nov 10 (Reuters) - Oil slipped towards $87 per
barrel on Wednesday as the impact of a stronger dollar and a
fall in Chinese oil imports outweighed news of a big drop in
U.S. crude oil inventories.
The dollar rose around 0.40 percent against a basket of
currencies <.DXY>, its fourth day of gains after several months
of losses ahead of the announcement of a second round of
monetary stimulus. []
Data showing a substantial fall in Chinese crude imports in
October also weighed on oil. China's crude imports fell 30
percent in October to 16.39 million tonnes, the lowest in at
least 18 months, from a record in September, customs data showed
on Wednesday. []
U.S. crude futures for December <CLc1> fell 30 cents to
$86.42 by 1230 GMT, after reaching $87.63 on Tuesday, its
highest since October 2008. ICE Brent <LCOc1> fell 30 cents to
$88.03 per barrel.
The dollar rise and Chinese data overshadowed the impact of
a bullish inventory report late on Tuesday by the American
Petroleum Institute (API), which said U.S. crude stockpiles
dropped a surprise 7.4 million barrels last week, defying
expectations of a 1.4 million-barrel build. []
"The API crude data is supportive for oil and significant
because the figures add up," said Christophe Barret, global oil
analyst at Credit Agricole in London.
"Crude stocks dropped because U.S. imports fell and refinery
runs increased to take advantage of a shortage of products in
Europe during the French refinery strikes. But the strikes are
over now, so it is only a temporary support for prices."
Oil prices have dipped slightly so far this week, but gained
more than 7 percent last week and technical analysts said charts
showed little sign of an immediate downward correction.
Clive Lambert, analyst at FuturesTechs, said he was "not too
concerned" about the sustainability of the move upwards because
of a strong band of support below current prices.
The International Energy Agency, which advises 28
industrialised countries, has raised its oil price forecasts,
citing growing supply uncertainty and looking towards prices at
over $200 per barrel by 2035.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic illustrating a band of possible technical
price support lines, click: http://link.reuters.com/meg74q
For a graphic of the IEA's oil price assumptions, click:
http://r.reuters.com/hyn54q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Analysts warned against reading too much into a single set
of trade data from China, the world's second-largest oil user.
The average of Chinese crude imports for September and
October, at 19.84 million tonnes, is roughly in line with
averages seen for the first eight months of the year at 19.73
million, suggesting re-stocking took place in the month before
October's week-long National Day celebrations.
Tuesday's API industry report pointed to tightening fuel
supplies in the United States. Stockpiles of distillates,
including heating oil and diesel, dropped by 4 million barrels
in the week to Nov. 5, while gasoline inventories slipped 3.4
million barrels.
Markets await confirmation of this declining trend across
fuel categories from the U.S. Energy Information Administration,
set to release government data on inventories and demand on
Wednesday at 1530 GMT.
U.S. crude inventories were forecast to have increased by
1.4 million barrels last week, a Reuters survey showed, while
stocks of distillates including heating oil and diesel were
expected to have fallen 1.9 million barrels. Gasoline stockpiles
were forecast to have dropped 800,000 barrels. []
The EIA raised its 2011 world oil demand forecast by 33,000
barrels per day, to 87.77 million bpd, from its previous monthly
forecast, and now sees a year-on-year rise of 1.44 million bpd.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Keiron Henderson)
