* Dollar index hits lowest since Sept. 2008
* Oil's push higher mirrors rise in equity markets
* Rockets fired on Israel prompts crude buying-traders
(Updates prices, quotes, background)
By Catherine Bosley
LONDON, Sept 11 (Reuters) - U.S. crude oil rose above $72 a
barrel in choppy trade on Friday, building on three sessions of
gains and lifted by a weaker dollar.
U.S. crude for October delivery <CLc1> was up 62 cents at
$72.56 a barrel by 1338 GMT. London Brent crude <LCOc1> was up
65 cents at $70.51 a barrel.
"The environment at the moment is probably relatively
positive. It's not just the equity market and the dollar but you
have also some oil-specific fundamentals," Commerzbank analyst
Eugen Weinberg said.
News that at least two rockets were fired from southern
Lebanon into northern Israel heighted fears over regional
stability and prompted crude buying, traders said.[]
"But the market needs at some point to take a step back and
ask whether these kinds of fundamentals are really supportive of
these kinds of prices," Weinberg also said.
Oil hit a year-high of $75 a barrel in late August, from
below $33 a barrel in December, as global oil demand recovered.
Crude's climb mirrored a rise in European equities <>,
which were headed for their sixth consecutive session of gains.
Since March 9, equities and oil have traded in close
correlation. For a graphic see:
http://graphics.thomsonreuters.com/099/CMD_BRNT20909.gif
Prices were also supported by the International Energy
Agency's expectation that oil demand would rise this year and
next as the global economy recovers, although it also said oil
stocks in the big developed countries of the OECD were up 4.6
percent in July versus a year ago. []
DOLLAR WEAKNESS
The dollar index <.DXY>, a measure of the U.S. unit's
performance against six other major currencies, has dropped 1.9
percent in the past week, and on Friday it briefly fell as low
as 76.548, its lowest since September 2008. []
A weak dollar, the currency of the oil market, was a concern
for the Organization of the Petroleum Exporting Countries, and
the group needed higher average oil prices to step up investment
in new output, its secretary-general said. []
The dollar's slide has helped boost demand for crude this
week, but an analyst at Commonwealth Bank said oil was unlikely
to get much more upward momentum from the greenback.
"Our forecast for currencies is for dollar depreciation -- a
lot of that has occurred already and while depreciation has been
an upside driver, that influence may be weakening," said David
Moore, commodities strategist at Commonwealth Bank in Sydney.
The Energy Information Administration reported on Thursday
that U.S. crude inventories fell by more than expected last
week. But inventories of gasoline and middle distillates rose,
and analysts said the oil products supply build likely would
offset the impact of the crude draw. []
(Additional reporting by Nick Trevethan in Singapore; editing
by Keiron Henderson)
