* U.S. crude stocks fall 4.4 mln bbls after storm - API
* Markets awaits EIA weekly inventory data at 1530 GMT
* Eyes on U.S. economic data
* Gold hits record high
(Updates throughout, previous PERTH)
By Christopher Johnson
LONDON, Nov 18 (Reuters) - Oil rose towards $80 per barrel
on Wednesday after an industry report showed U.S. crude oil
stocks fell steeply last week, but gains were limited by doubts
over the outlook for economic growth and energy demand.
Weekly data from the American Petroleum Institute late on
Tuesday showed U.S. crude inventories fell much more sharply
than expected last week, dropping 4.4 million after storms in
the Gulf of Mexico disrupted supplies. []
Investors awaited a report from the Energy Information
Administration at 1530 GMT, considered the most reliable data on
the U.S. oil industry, to confirm the API figures. []
"If the EIAs confirm the big drawdown, and I think they
probably will, the market could move up sharply -- probably to
above $80 per barrel," said Eugen Weinberg, head of commodity
research at Commerzbank.
U.S. light crude oil futures for December delivery rose 60
cents to $79.74 a barrel by 0920 GMT, adding to Tuesday's gains
of 24 cents.
London Brent crude <LCOc1> gained 58 cents to $79.55.
Financial market will scrutinise U.S. economic data due on
Wednesday to gauge the health of the economy, after reports this
week painted a picture of a slow recovery from recession with
ample slack to cool inflation. []
"DEFYING GRAVITY"
Indicators on Wednesday include U.S. consumer prices, real
weekly earnings and housing starts for October. <ECON>
The United States is the world's biggest oil consumer and
recession there over the past 18 months has helped keep a lid on
global demand for fuel. Expectations of economic recovery have
helped propel oil prices higher this year but several analysts
argue that the market may have moved too far too fast.
"Commodities, including oil, have seemed to defy gravity
over the last few weeks, partly supported by the dollar, but
also on a false assumption that economic recovery will lead to a
further rise in prices," said Weinberg.
"That is probably wrong because the economic recovery is
already reflected adequately in the current prices," he said.
The U.S. currency, which fell to 15-month lows against other
major currencies this week, has been helping drive commodities
higher for most of this year as investors have sought hard
assets to hedge against the depreciating currency.
The dollar slipped on Wednesday, after its biggest rise in
three weeks on Tuesday, as traders awaited U.S. inflation data.
[]
The U.S. currency had rallied following rare comments on the
dollar by U.S. Federal Reserve Chairman Ben Bernanke, comments
later echoed by other Fed officials and European Central Bank
President Jean-Claude Trichet. [].
The dollar has declined steadily since March against a
basket of other currencies, a decline that has also helped sput
buying of other commodities.
Gold <XAU=> hit a record high of $1,146.95 an ounce in
Europe on Wednesday, as a dip in the dollar index fuelled
momentum buying of the precious metal. []
Oil has rallied from below $33 last December even though
global demand fell year-on-year for the first nine months of
2009, according to the International Energy Agency. []
(Additional reporting by Fayen Wong; editing by William Hardy)
