* U.S. oil stocks fall; excess down to lowest in 11 months
* Oil set for biggest annual gains since 1999
* Demand set to continue gradual recovery next year
(Updates throughout)
By Joe Brock
LONDON, Dec 31 (Reuters) - Oil rose towards $80 on Thursday,
poised for the biggest annual climb in a decade, a year after
posting huge losses as the global economic crisis sapped demand.
Oil was supported on Thursday after data from the U.S.
Energy Information Administration (EIA) showed declines in crude
oil stockpiles last week, boosting expectations of demand
recovery in the world's largest energy user. []
U.S. crude for February delivery <CLc1> rose 44 cents to
$79.72 a barrel by 1138 GMT, its seventh straight session of
gains. Prices have risen 14 percent in just over two weeks.
London Brent crude <LCOc1> rose 47 cents to $78.50.
"A combination of cold weather in the U.S., thin trading
conditions, and relatively constructive EIA data all helped
contribute to the advance," Edward Meir, oil analyst at MF
Global said in a daily energy report.
U.S. oil futures were on track for the sharpest annual
percentage gain since 1999 but remained almost half the all-time
high of $147.27 hit in July 2008.
After sliding to a five-year low under $33 at the end of
2008, oil prices staged a steady climb to a high of $82 in
October this year, making the annual average $62.
Oil's near 80 percent rise this year was part of a
broad-based rally across commodities and equities as investment
returned to markets drained by the global economic recession.
"While it was nominally a very strong year for commodities,
it was a relative weak year for passive investors," said Olivier
Jakob, oil analyst at Petromatrix.
For a FACTBOX on global market losses and gains for 2009
click here []
Next year, analysts expected oil prices to consolidate this
year's gains as demand continues its gradual recovery.
"TRANSITION" IN 2010
"We expect 2010 to be a year of transition between the
demand concerns of 2009 and the supply concerns of 2011, with in
addition geopolitical developments having a heightened
importance," Barclays Capital said in a research note.
U.S. crude stockpiles fell by 1.5 million barrels in the
week to Dec. 25, just off an expected 2 million-barrel decline,
while gasoline inventories showed a surprise decline, data from
the EIA showed on Wednesday. []
Crude inventories have slid by 19.5 million barrels in the
past four weeks, eroding the excess supply to 50.1 million
barrels, although stocks were still far above normal levels.
There were signs on Thursday that crude oil supplies from
some areas were on the rise as OPEC output hit a 2009 high in
December led by increases in Nigeria and smaller rises
elsewhere, a Reuters survey showed. []
Commodity markets are on course for their strongest year
since 1973, lifted by oil's biggest annual gains in a decade and
a 140 percent surge in copper prices. []
For a graphic showing how the 19 commodities that make up
the CRB index have performed, double-click:
http://graphics.thomsonreuters.com/129/CMD_RCRB1209.gif
(Additional reporting by Ramthan Hussain in Singapore; Editing
by William Hardy)
