* Dollar rises, U.S. stock markets slip
* Saudi Arabia says world economy can handle $75-$80 oil
* U.S. housing data better than expected
* Japanese exports show modest signs of recovery
(Updates prices, details)
By David Sheppard
LONDON, May 27 (Reuters) - Oil prices rose to a six-month
high above $63 a barrel on Wednesday after Saudi Arabia, OPEC's
biggest member, said the global economy had strengthened enough
to cope with oil at $75-$80 a barrel.
Ahead of a meeting of the Organization of Petroleum
Exporting Countries in Vienna Thursday, Saudi Oil Minister Ali
al-Naimi said oil prices would continue to rise, recovering
from lows near $32 at the turn of the year.
"The price rise is a function of optimism, better things
are coming in the future," Naimi told reporters in Vienna.
The minister said OPEC did not need to change its output
policy, which has already seen the group agree to remove 4.2
million barrels per day of oil from the market in a bid to
shore up prices battered by recession.
U.S. crude oil for July delivery <CLc1> rose to touch
$63.45 a barrel, the highest level since mid-November, before
easing back to trade up 16 cents at $62.61 a barrel by 1445
GMT. London Brent crude <LCOc1> rose 32 cents to $61.56 a
barrel.
Bolstering the market, U.S. housing data showed the pace of
sales of existing homes in the United States rose 2.9 percent
in April, supporting views that the three-year housing
recession was near a bottom.
But weakness in the U.S. stock market tempered oil's
strength. Wall Street shares declined amid gloom around General
Motors as it inched closer to bankruptcy, and strength in the
U.S. dollar against the euro, dealers said.
"We're not really seeing a strong recovery yet, but I think
OPEC are implying they don't see oil demand falling any
further," VTB Capital analyst Andrey Kryuchenkov said.
"Everyone talks about green shoots but we're not completely
out of the woods -- to see a real price rally we'll need to see
a larger pick-up in demand."
Global oil demand is seen falling this year at the fastest
rate since 1981, with the International Energy Agency, adviser
to 28 industrialised nations, predicting a decline of 2.56
million barrels per day.
Crude inventories have risen to around 62 days of forward
cover, but expectations of a slight drawdown in U.S. crude
inventories are supporting prices, analysts said.
A preliminary Reuters poll ahead of U.S. weekly inventory
data showed an average forecast of a 1.1 million drawdown in
crude stocks and a 1.8 million decline in gasoline stocks last
week.
Data from the American Petroleum Institute has been delayed
by one day until Wednesday while U.S. Energy Information
Administration oil inventory data will be released Thursday due
to the U.S. Memorial Day holiday at the start of this week.
Prices also shot above the key technical level of the
200-day moving average for the first time in more than eight
months, adding to some analysts' convictions that oil has found
a new price floor at $60 and may rise toward $65.
(Additional reporting by Richard Valdmanis in New York, Fayen
Wong in Perth; Editing by David Gregorio)
