* Coming up: EIA inventory statistics; 1430 GMT
* Cushing crude stockpiles fall from record -API
* For a technical view, click: []
* TAKE A LOOK at the Reuters Energy Summit: []
(Updates prices, adds quotes, details, updates graphic)
By David Sheppard
LONDON, May 26 (Reuters) - Oil rose by almost 3 percent on
Wednesday to climb back above $70 a barrel after a U.S. industry
report showed a steep drop in gasoline stockpiles in the world's
largest energy consumer.
Prices had slumped to lows near $67 a barrel at one stage on
Tuesday, pressured by concerns about the health of European
banks and mounting tensions between North and South Korea.
But a late rally on Wall Street that spread to Asia and
Europe on Wednesday lifted sentiment in the oil market. The
rebound was aided by a far larger-than-expected 3.2 million
barrels drop in U.S. gasoline stocks last week, reported by the
American Petroleum Institute (API). []
U.S. crude for July delivery <CLc1> was up $1.97 a barrel at
$70.72 at 1139 GMT. Brent traded up $1.71 at $71.26 a barrel.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Please click here for a technical outlook for the oil price
http://graphics.thomsonreuters.com/gfx/WT_20102605101330.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Traders said both commodity and equity markets were
benefiting from bargain hunters swooping after European shares
slumped to a nine-month low, but urged caution about the
potential for a sustained rally.
"Despite the impressive reversals, there is very little
indication that the bearish market psychology is about to change
any time soon," MF Global analyst Edward Meir said.
"Until signs emerge that things are stabilizing in the debt
markets, (even if they simply do not get any worse), we have to
suspect that rallies will continue to be vulnerable in
practically all the markets."
Oil prices are still down by about 20 percent from the
19-month high of $87.15 hit in early May.
While the API reported gasoline stocks fell by far more than
the 200,000 decline predicted by analysts, stocks of distillates
and crude oil continued to climb.
Distillate inventories, including heating oil and diesel,
rose by 1.5 million barrels versus expectations of no change,
while the nation's crude stockpiles rose 616,000 barrels.
At Cushing, Oklahoma, the delivery point for the U.S. crude
contract, stocks fell 772,000 barrels from a record 37.99
million. []
Later on Wednesday, traders will be watching the release of
weekly fuel stocks data from the U.S. Energy Information
Administration (EIA), the statistical arm of the Department of
Energy, to see if they confirm the API numbers.
"Wednesday's DOE report could well be critical," said Peter
Beutel, president of Cameron Hanover, in New Canaan,
Connecticut.
"A bearish report could tip us over the edge. Bullish
figures have less opportunity for creating high drama, but a
clean sweep could change things."
OPEC oil ministers on Tuesday played down the slide in oil
prices to below that level, but many have continued to argue
prices between $70 and $80 a barrel are necessary to maintain
invesment in future supplies. []
Jean-Jaques Mosconi, head of strategy at French oil major
Total <TOTF.PA>, told Reuters Energy Summit prices were unlikely
to fall far below $70 a barrel as global demand is increasing.
"Europe is the big issue here. China is doing well, India is
growing, the Middle East is growing. Even the U.S. is
recovering," Mosconi said.
"If oil goes back down below $70 you will see OPEC come back
and ask for better compliance."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Click the link below for Mosconi interview with Reuters Insider
http://link.reuters.com/zug36k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
On Tuesday, the EIA said world oil demand will continue to
grow through 2030, but demand that year will be about 2.5
percent less than previously thought due to use of renewables
and higher oil prices. []
Global oil demand will average 103.9 million barrels per day
in 2030, down from the agency's 106.6 million bpd demand
estimate in last year's long-term outlook.
(For news from the Reuters Global Energy Summit, click on
http://www.reuters.com/summit/GlobalEnergy10?pid=500)
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by Keiron Henderson)
