* Oil near $123, after touching 12-week low on Tuesday
* US gasoline stocks unexpectedly fall
* Iran to continue nuclear path - supreme leader
(Recasts with U.S. inventory data, updates prices)
By Santosh Menon
LONDON, July 30 (Reuters) - Oil rebounded from lows to near
$123 a barrel on Wednesday after U.S. government data showed a
drop in gasoline stocks last week, surprising analysts who had
expected an increase.
The U.S. Energy Information Administration said gasoline
inventories fell by 3.5 million barrels compared with forecasts
of a 200,000 barrel build, as U.S. gasoline production dropped
and imports fell.
"The report offers the bulls more potential than they have
had over the last few weeks," said Rob Kurzatkowski, futures
analyst at OptionsXpress in Chicago.
U.S. crude <CLc1> rose 83 cents to $123.02 by 1519 GMT,
recovering from a low of $120.80 earlier in the session and well
clear of a low of $120.42 on Tuesday, the lowest since May 6.
European benchmark London Brent <LCOc1> rose 56 cents to
$123.27.
The EIA said U.S. crude oil stocks dropped by 100,000
barrels, 1.5 million less than the fall analysts had expected,
while distillate stocks rose 2.4 million barrels, 500,000
barrels more than expected. []
"However, the rest of the report looks bearish, with crude
stocks dropping less than expected and with distillates
increasing more than anticipated," said Jim Ritterbusch,
president of Ritterbusch & Associates.
Oil has slid from a record high of $147.27 on July 11, the
steepest drop from a high since early 2007, pressured by signs
that costly fuel and an economic slowdown are curbing demand,
especially in the United States.
A cut to supply in Nigeria earlier this week and tension
over Iran's nuclear programme limited oil's decline. Iran is the
second-largest producer in the Organization of the Petroleum
Exporting Countries.
Iran will pursue its nuclear path, the country's highest
authority, Supreme Leader Ayatollah Ali Khamenei, said on
Wednesday, speaking just before a deadline set by world powers
in the dispute.
Western powers gave Iran two weeks from July 19 to respond
to their offer to hold off on imposing more U.N. sanctions on
Iran if Tehran would freeze any expansion of its nuclear work.
In Nigeria, Africa's top oil producer, Royal Dutch Shell
declared force majeure on Bonny Light exports after militants
blew up parts of a key pipeline earlier this week.
(Additional reporting by James Topham in Tokyo and Alex Lawler
in London, editing by James Jukwey)
