* U.S. crude stocks down 2.2 mln bbls last week -API
* Fed interest rate decision expected later on Wednesday
* Investors turn to less risky assets on economy concerns
(Adds drop in Japanese imports, updates prices)
By Alejandro Barbajosa
SINGAPORE, Jan 27 (Reuters) - Oil was little changed on
Wednesday near $75 as a firm dollar offset a surprise drop in
crude stockpiles in top consumer the United States.
The dollar was trading close to four-month highs against a
basket of currencies <.DXY>, while investors awaited the
outcome of a U.S. Federal Reserve policy meeting later in the
day.
"Over the last few days, the dollar has been stronger
because people are trying to get risk off their portfolio,"
said Keichi Sano, general manager of research at SCM Securities
in Tokyo.
"People now are in the mood of risk off, not risk on."
U.S. crude inventories unexpectedly dropped by 2.2 million
barrels last week, an industry report showed on Tuesday.
[]
U.S. oil for March delivery <CLc1> was unchanged at $74.71
a barrel by 0518 GMT, after touching a five-week intraday low
of $73.82 on Tuesday. London ICE Brent for March settlement
<LCOc1> shed 6 cents to $73.23.
The Fed's Open Market Committee (FOMC) on Wednesday will
conclude a two-day meeting that is expected to yield little in
terms of a U.S. monetary policy shift.
"I don't think FOMC will give us any hint of higher
interest rates soon," Sano said. "For now, we might struggle to
go lower than $70," a barrel, he added.
INVENTORIES DECLINE
The drop in U.S. crude supplies came as imports fell by 1.5
million bpd to 8.31 million bpd, according to the American
Petroleum Institute's weekly report. Inventories were expected
to have gained 1.4 million barrels, a Reuters poll showed.
[]
Some analysts attributed the drop in crude imports to
weather-related disruptions that slowed offloading along the
U.S. Gulf Coast.
U.S. inventories of distillates, a fuel category that
includes heating oil and diesel, fell by 2 million barrels
versus forecasts of a 1.7 million-barrel decrease. Gasoline
stocks grew by 916,000 barrels, compared to expectations for a
1.1-million gain.
Traders also awaited the release of government inventory
statistics from the Energy Information Administration (EIA) at
1600 GMT on Wednesday.
FINANCIAL RESTRICTIONS
China enforced stricter reserve ratios for selected banks
on Tuesday, triggering a wave of concern that tightening
measures will restrain energy demand. Industrial and Commercial
Bank of China, the country's largest bank, has stopped rolling
over some loans. []
And last week, U.S. President Barack Obama proposed
tightening trading rules for banks.
"Possible financial restrictions on hedge funds, that is
also a concern for participants in the commodity markets," Sano
said.
The phase-out of stimulus measures in China, the world's
second-largest oil user, could jeopardise a rebound in global
oil demand. Forecasters including Goldman Sachs have
highlighted the importance of emerging markets in Asia to drain
unseasonably-high oil inventories.
But the return of positive global oil demand growth "may
not be enough to put upward pressure on oil prices in 2010,"
the Center for Global Energy Studies, a London-based think-tank
said in a report dated Jan. 25.
The volume of Japan's monthly customs-cleared crude oil
imports dropped 6.3 percent in December from a year ago, the
finance ministry said on Wednesday. []
(Editing by Clarence Fernandez)
