* Oil rises more than $4 after touching 12-week low on
Tuesday
* US gasoline stocks unexpectedly fall
* Iran to continue nuclear path despite deadline
(Updates prices throughout)
NEW YORK, July 30 (Reuters) - Oil rose more than $4 a
barrel on Wednesday after U.S. government data showed an
unexpected drop in gasoline stocks as suppliers facing weak
consumer demand cut production and imports.
U.S. crude <CLc1> settled up $4.58 at $126.77 a barrel
after falling to $120.42 on Tuesday, the lowest level since May
6. London Brent crude <LCOc1> rose $4.39 to settle at $127.10 a
barrel.
U.S. gasoline stocks fell by 3.5 million barrels last week,
according to the U.S. Energy Information Administration,
countering analyst calls for a 200,000-barrel build. []
"The gasoline data showed a stronger demand than expected
and support at $120 held, causing crude futures to rally," said
Phil Flynn, analyst at Alaron Trading.
The EIA report also showed U.S. crude oil stocks dropped by
100,000 barrels, lower than analysts forecasts, while
distillate stocks rose 2.4 million barrels, more than
expected.
Additional support came from U.S. refinery problems, with
BP <BP.L> cutting rates at its Texas City, Texas, plant due to
mechanical problems. Top U.S. refiner Valero <VLO.N> plans to
cut gasoline production by an average of 330,000 barrels per
day (bpd) in the third quarter at its 16 plants.
"The combination of several refinery issues is supporting
gasoline, along with bullish gasoline inventory data," said Tom
Bentz, analyst at BNP Paribas Commodity Futures Inc, adding
short covering was also fueling the gains.
Oil has plunged from a record $147.27 hit on July 11 in the
steepest drop from a high since early 2007, pressured by signs
that costly fuel and wider economic problems are curbing
demand, especially in the United States
Strong growth from emerging economies like China has
stretched poor supply growth over the past six years, launching
a rally that sent crude up sevenfold at its peak.
Further strength has come from investors buying commodities
as a hedge against inflation and the weak dollar, tensions
between Iran and the West, and supply disruptions.
Iran's supreme leader, Ayatollah Ali Khamenei, said on
Wednesday Tehran would pursue its nuclear path despite a
deadline set by world powers in the dispute over Tehran's
nuclear program. []
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 the OPEC member would freeze any expansion of its
nuclear work.
In Nigeria, Africa's top oil producer, Royal Dutch Shell
<RDSa.L>, declared force majeure on Bonny Light exports after
militants blew up parts of a key pipeline earlier this week.
Militant attacks have disrupted supplies from the OPEC
nation this year, pushing up oil prices.
(Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons
in New York; James Topham in Tokyo; Santosh Menon and Alex
Lawler in London; Editing by Christian Wiessner)
