* U.S. new home construction falls sharply in October
* Inventory of homes being build hits record low
* U.S. oil stocks down after storm disruptions last week
* Dollar slips against basket of other currencies
(Updates throughout)
By Matthew Robinson
NEW YORK, Nov 18 (Reuters) - Oil prices rose on Wednesday
as a drop in U.S. oil and fuel inventories outweighed wider
economic concerns.
Crude stockpiles in the world's top consumer fell by
900,000 barrels last week, more than forecasts for a
300,000-barrel drop, the U.S. Energy Information Administration
reported. []
Gasoline and distillate stocks dropped by 1.7 million and
300,000 barrels. respectively.
"Overall, the figures were fairly bullish. Gasoline was a
much larger draw than expected," said Mike Zarembski, senior
commodities analyst at optionsXpress in Chicago.
The declines came after Tropical Storm Ida forced oil and
natural gas companies to shutter production facilities in the
Gulf of Mexico last week.
U.S. crude <CLc1> settled 44 cents higher at $79.58 a
barrel, while London Brent crude <LCOc1> gained 50 cents to
settle at $79.47 a barrel.
Despite the inventory drawdowns, analysts said the EIA
report showed demand in the world's top consumer remained weak,
down 4.1 percent against last year for all refined products.
The financial crisis has battered fuel demand in developed
economies, such as the United States, knocking crude from
record highs near $150 a barrel in July 2008 to below $33 a
barrel in December last year.
Optimism that an economic turnaround could push up demand
has supported prices this year, with energy traders looking to
economic data for signs of a rebound.
Data showed construction of new homes in the United States
fell sharply last month, showing potential weakness in the
economy's recovery, while consumer prices rose slightly more
than expected. [] The data helped pressure U.S.
stocks. []
U.S. travel and auto group AAA forecast 1.4 percent more
Americans will travel this Thanksgiving holiday than last year
as consumer sentiment improves. []
Further support for crude came as the dollar slid against
the euro, with fresh data doing little to alter the view that
U.S. interest rates will remain at record lows well into 2010.
[]
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.
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 Gene Ramos, Edward McAllister and
Robert Gibbons in New York and Christopher Johnson and David
Sheppard in London; Editing by Walter Bagley)
