* President Obama to meet Saudi king, discuss oil
* EIA shows unexpected rise in crude stocks, less gasoline
* Dollar strengthens on Asian vote of Treasuries confidence
(Updates prices, adds EIA data, comment)
By Chris Baldwin
LONDON, June 3 (Reuters) - Oil markets fell on Wednesday as
an unexpected rise in U.S. crude inventories and a strengthening
dollar set investors on a more cautious path ahead of the $70 a
barrel mark.
U.S. light, sweet crude <CLc1> was down $2.00 at $66.55 a
barrel by 1534 GMT, off an earlier peak of $68.95. ICE Brent
crude <LCOc1> was down $1.93 at $66.24 a barrel.
Crude oil inventories in the United States jumped last week
by 2.9 million barrels due to increased imports, data released
by the Energy Information Administration showed, vs. a Reuters
poll that forecast a draw of 1.4 million barrels. []
"The rising crude number caught everyone wrong-footed," said
Addison Armstrong, director of research at Tradition Energy in
Connecticut.
"The rise in imports was sizable, but I'm not really sure
where the demand is coming from. It looks like the oil went into
storage," Armstrong said.
SAUDI ASSURANCES
U.S. President Barack Obama flew on Wednesday to Saudi
Arabia, the world's largest oil exporter, where he said he would
raise the issue of price volatility with King Abdullah and
indicate no halt to the need for oil imports. []
"The Saudis want to be assured that there will be a future
for oil consumption. They want security of demand," said Simon
Wardell, senior oil analyst at Global Insight in London.
"Obama for his part will be persuading them to continue
investing in new production, which is not likely to have too
much impact on spot prices in the near term, but will come five
or 10 years down the road," Wardell said.
The dollar, which in its weakness had sparked risk appetite
for investors into other assets, including a resurgent crude
market, recovered from its lowest levels of 2009 against the
euro after monetary sources in Asia said they would keep buying
U.S. Treasuries, even if the U.S. credit rating were to be cut.
[]
U.S. front month crude prices broke above an important
200-day moving average price level last Tuesday, and had closed
higher every day since until the last session, when the market
finished down 3 cents.
"The strong influence has been the breakout of the 200-day
moving average last week, which has brought the market higher
ever since," said Olivier Jakob, an oil analyst at Swiss-based
PetroMatrix.
"We are very close to this psychological $70 level, and the
bulls can afford a slight retracement and still keep their
bullish trend," said Jakob.
(Additional reporting by Joshua Schneyer in New York; editing
by James Jukwey)
