* Steadies after 6 days of losses; dollar, equities support
* EIA data show builds in oil product stocks
* Saudi Arabia keeps supplies steady to Europe
(Updates with equities, dollar)
By Joe Brock
LONDON, Dec 10 (Reuters) - Oil rose above $71 a barrel on
Thursday, recovering after falling more than 2 percent in the
previous session, supported by a weaker dollar and rising
equities.
The U.S. dollar weakened against a basket of currencies on
Thursday <.DXY>, while European stock markets rallied as
investors returned to riskier asset.
A weaker dollar makes commodities like oil cheaper for
investors holding alternative currencies.
U.S. crude for January delivery <CLc1> rose 45 cents to
$71.12 a barrel by 1218 GMT, after losing almost $2 in its sixth
straight day of losses on Wednesday, when it hit the lowest
since early October at $70.13.
London Brent crude <LCOc1> gained 52 cents to $72.91.
"I think today we are seeing a rebound after the previous
day's sharp losses," Carsten Fritsch, oil analyst at Commerzbank
in Frankfurt said on Thursday.
"The $70 level is holding for now but I think there is more
downside potential further forward."
Oil prices dropped on Wednesday after U.S. Energy
Information Administration data showed builds in U.S. refined
product stocks, highlighting the weakness of demand in the
world's largest energy consumer. []
There were further signs that global oil supplies were
rising on Thursday as Saudi Arabia restored full term crude
allocations to at least two Asian buyers for January and kept
contracted volumes to six others, according to industry sources.
[]
However, the world's top oil exporter will keep crude oil
supplies to customers in Europe unchanged in January compared to
December.
BRENT PREMIUM
The spread between front-month Brent and U.S. crude oil
futures widened to around $2 a barrel on Thursday, stretched by
the build in stocks at Cushing, Oklahoma, the delivery point for
U.S. crude oil futures.
For a graphic of Brent versus U.S. crude, which also shows
the spread between the first and second U.S. crude futures
months and the level of crude oil stocks at Cushing, click on:
http://graphics.thomsonreuters.com/129/CMD_OKL1209.gif
"Despite the drop in overall crude stocks, inventories at
Cushing are approaching the record high in February, widening
the spread between Brent and WTI (U.S. crude)," Fritsch said.
The EIA data on Wednesday showed crude stocks at Cushing
were up last week by 2.5 million barrels at 33.4 million
barrels, near the 35 million-barrel peak hit in February.
Saudi Arabia's move to restore full term crude supply to two
Asian buyers comes ahead of OPEC's Dec. 22 meeting at which most
members have said they will not raise production targets.
Ecuador's energy minister on Wednesday said he expected OPEC
to leave oil output targets unchanged at the meeting, setting
the stage for prices to remain between $70 and $80 per barrel.
(Editing by James Jukwey)
