* U.S. crude stocks fall 0.9 mln barrels after storm - EIA
* U.S. gasoline stocks fall 1.7 mln barrels - EIA
* U.S. distillate stocks fall 0.3 million barrels - EIA
* Dollar slips against basket of other currencies <.DXY>
(Updates prices, adds EIA data)
By Christopher Johnson
LONDON, Nov 18 (Reuters) - Oil rose to near $80 per barrel
on Wednesday after a government report showed U.S. crude oil
stocks fell by more-than-expected last week and as the dollar
weakened against a basket of other currencies.
The U.S. Energy Information Administration (EIA), the
statistical arm of the Department of Energy, said crude stocks
in the world's largest energy consumer fell by 900,000 barrels
last week, against market expectations for a 300,000 barrel
draw. []
Gasoline and distillate stocks also fell, by 1.7 million and
300,000 barrels respectively.
"Overall, the figures were fairly bullish -- gasoline was a
much larger draw than expected. That was the headline figure,"
said Mike Zarembski, senior commodities analyst at
Optionsexpress in Chicago.
U.S. light crude oil futures for December delivery rose as
high as $80.33 per barrel after closing at $79.14 on Tuesday. By
1604 GMT prices were up 75 cents on the day at $79.89 per
barrel.
London Brent crude <LCOc1> gained 82 cents to $79.79,
trading just slightly below its 2009 high of $80.26 a barrel.
While U.S. crude stocks fell, the rise in prices was perhaps
muted after an industry report had suggested on Tuesday that
crude stocks had fallen by 4.4 million barrels last week due to
disruptions caused by Tropical Storm Ida. []
"The crude draw was as expected, (but) not nearly as
bullish as the American Petroleum Institute," said Zarembski.
Traders were also watching the direction of the U.S. dollar.
The dollar has fallen steadily for most of this year and hit a
15-month low this week, helping drive commodities higher as
investors have sought hard assets to hedge against the
depreciating currency.
Oil is priced in dollars on world markets and energy prices
often move in the opposite direction to the U.S. currency.
"The market has picked up as the dollar has retrenched,"
said Harry Tchilinguirian, oil analyst at BNP Paribas.
"With oil trading (rightfully or wrongfully) inversely with
the dollar and positively with equities, buying interest in oil,
like other commodities has risen," BNP said in a statement.
BNP Paribas raised its average price forecast for U.S. crude
in 2010 to $81 a barrel from $78 a barrel. It also raised its
fourth quarter of 2009 forecast to $77 per barrel from $66.
[]
TOO FAR? TOO FAST?
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 push 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 Eugen Weinberg, head of commodity
research at Commerzbank.
"That is probably wrong because the economic recovery is
already reflected adequately in the current prices," he said.
Gold <XAU=> hit a record high of $1,149.15 an ounce in
Europe on Wednesday, partly on the dip in the dollar. []
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. []
For a comprehensive database of oil supply and demand
fundamentals upstream and downstream, Reuters subscribers can
click on http://bond.views.session.rservices.com/ce/
(Additional reporting by David Sheppard in London and Edward
McAllister in New York; Editing by Keiron Henderson)
