* Oil recoups some losses after five days of declines
* API data shows surprise decrease in U.S. crude stocks
* Saudi oil minister calms worries over Gulf economies
(Updates prices, detail)
By Christopher Johnson
LONDON, Dec 9 (Reuters) - Oil <CLc1> rose more than $1
towards $74 a barrel on Wednesday, rallying after several days
of falls, on industry data showing a big drop in U.S. crude
stocks and on a weaker U.S. dollar <.DXY>.
The American Petroleum Institute (API) said in a report late
on Tuesday that crude inventories in the world's top oil
consumer fell 5.8 million barrels last week, bucking
expectations for a rise, as refiners boosted fuel production.
The market awaited more data on U.S. oil stocks from a
weekly Energy Information Administration (EIA) report due at
1530 GMT. A Reuters poll ahead of the EIA data forecast it would
show a 600,000-barrel rise in U.S. crude oil stocks. []
U.S. crude for January delivery <CLc1> was up $1.03 per
barrel at $73.65 by 1151 GMT, having hit an earlier high of
$73.87. The contract fell $1.31 on Tuesday.
NYMEX crude, which hit its lowest level since late November
at $72.43 on Monday, has lost about 7 percent this month.
London Brent crude <LCOc1> gained 73 cents to $75.92.
Losses over the last five days have been partly driven by a
recovery in the dollar. Oil is priced in dollars so a rise in
the currency makes fuel more expensive to most consumers outside
the United States.
The dollar <=USD> index against major currencies <.DXY> was
down around 0.5 percent by 1142 GMT.
For a graphic showing the oil and dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
"CORRECTION"
"The oil market is seeing a correction after several days of
heavy falls," said David Wech, head of energy studies at JBC
Energy in Vienna. "The inventory data is clearly a factor."
The oil market also received some support from Saudi Oil
Minister Ali al-Naimi, who said Gulf economies were strong
despite anxieties over financial strains in the region, easing
fears Dubai's debt problems would hamper economic recovery.
"The soundness and growing diversification of our regional
economy will help restore calm following the turbulence of the
moment," he told a petrochemicals conference in Dubai.
[]
The API data on Tuesday showed U.S. gasoline inventories
fell by 753,000 barrels, while distillates, which include
heating oil and diesel, rose by 1 million barrels.
However, the API said crude stocks at Cushing, Oklahoma, the
delivery point for U.S. oil futures, rose 1.5 million barrels,
helping depress the price of front-month crude futures, creating
the deepest front-month discounts since August.
For a graphic showing steepening of the forward curve,
click:
http://graphics.thomsonreuters.com/129/CMD_NYOIL21209.gif
Analysts say they expect the contango to deepen further over
the next few weeks and see no return to backwardation until well
into 2010 as U.S. oil demand stays relatively weak.
(Editing by William Hardy)
