* API sees more-than-expected 6-mln-bbl fall in crude stocks
* Market awaits EIA inventory data for confirmation
* Dollar rises against the euro
(Updates prices)
By David Sheppard
LONDON, June 10 (Reuters) - Oil topped $71 a barrel on
Wednesday for the first time in 7-months on signs demand for
crude could be recovering, with U.S. crude stocks falling last
week and the Department of Energy (DOE) raising its forecast for
global demand.
The American Petroleum Institute (API) reported U.S. crude
stocks fell by 6 million barrels in the week ended June 5,
topping analysts' expectations for a 400,000-barrel draw, as
refiners ramped up production. []
The crude stock drawdown in the world's largest energy
consumer added to a sense weak demand was bottoming, with the
U.S. Energy Information Administration (EIA) -- the statistical
arm of the DOE -- raising its 2009 demand forecast for the
first time since September. []
U.S. light crude for July delivery <CLc1> rose to a high of
$71.65 a barrel on Wednesday, before pulling back slightly to
trade up 89 cents at $70.90 at 1401 GMT after the dollar
strengthened.
London Brent crude <LCOc1> gained 61 cents to $70.23 a
barrel.
"The crude stock draw and the EIA demand revision has
bolstered hopes demand is starting to improve," VTB Capital
analyst Andrey Kryuchenkov said.
"Markets are also pricing in the fact that high levels of
global inventories are going to fall pretty fast in the third
and fourth quarter if OPEC can maintain their current output
levels."
Oil has more than doubled from the low $30s hit this winter
as investors have started to price in hopes for an economic
recovery which should boost oil demand.
Output cuts by the Organization of the Petroleum Exporting
Countries (OPEC) totalling 4.2 million bpd since September have
also helped prices to recover.
The group has succesfully complied with around 80 percent of
its cuts, but analysts have cautioned this was likely to slip as
prices rise.
Kuwait's oil minister said on Wednesday the producer group
-- responsible for more than a third of the world's crude output
-- could raise production if oil prices rose towards $100 a
barrel. []
Economists have voiced concerns the rapid run-up in crude
prices could derail any fragile economic recovery.
INVENTORIES
Prices could gain further on Wednesday if the EIA confirms
the API's fall in crude inventories, in its own data on
Wednesday to be released at 1430 GMT.
"Any EIA reinforcement tonight of the already released API
inventory data will serve to underpin $70 as support," Jonathan
Kornafel, Asia director of Hudson Capital Energy, said in a
report.
A Reuters expanded inventory poll from 13 analysts called
for a 400,000 barrel drawdown in crude stocks, a 1.4 million
barrel build in distillate stocks and an 800,000 barrel increase
in gasoline stocks. Refinery utilization was seen rising 0.3
percentage point to 86.6 percent of capacity []
The dollar, whose weakening contributed to pushing prices up
$1.92 on Tuesday, turned higher against the euro on Wednesday.
[]
Oil tends to move in the opposite direction to the
greenback, as commodities priced in dollars become cheaper when
it weakens and more expensive when it strengthens.
(Additional reporting by Maryelle Demoneot and Felicia Loo
in Singapore, Editing by William Hardy)
