* U.S. data showed a 3.27 million bbls drop
* Middle distillate demand jumps by 16 pct
* Chinese crude imports fall below 4 million bpd in October
* Dollar index <.DXY> rises for fourth consecutive day
(Recast, update prices following U.S. weekly oil data)
By Christopher Johnson and Ikuko Kurahone
LONDON, Nov 10 (Reuters) - Oil rose above $87 per barrel on
Wednesday after U.S weekly oil data showed a surprise fall in
crude inventories and larger than expected drops in oil product
stocks.
U.S. crude oil futures <CLc1> rose 67 cents to $87.39 by
1543 GMT. ICE Brent <LCOc1> rose 23 cents to $88.56 per barrel.
On Tuesday, U.S. crude touched a two year high of $87.63.
Crude stocks fell 3.27 million barrels in the week to Nov.
5, against analysts' forecasts for a 1.4 million barrel rise,
data the U.S. Energy Information Administration showed. []
"Today's EIA data was bullish across the board as crude,
gasoline, and distillate stocks yielded decent draws,
significantly more than expectations. In addition, an uptick in
refinery utilization was not enough to offset strong demand for
gasoline and distillates," Chris Jarvis, senior analyst, Caprock
Risk Management in New Hampshire, said.
"Overall the market will likely view this as bullish, which
underpins strong secular trends on the macro level coupled with
concerns over a weak dollar, reinforcing the bullish sentiment
for the energy complex."
The impact of the fall U.S. oil inventories was overweighed
a stronger dollar against the euro and the yen <.DXY>.
A stronger dollar is typically said to reduce the appeal of
commodities as an investment. []
Oil prices began Wednesday pressured by data showing a
substantial fall in Chinese crude imports in October.
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. []
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, was 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.
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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
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(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Keiron Henderson)
