* U.S. crude stocks down 2.2 mln bbls last week -API
* Fed interest rate decision expected later on Wednesday
* China loan tightening curbs risk appetite
(Adds comment, previous SINGAPORE)
By Chris Baldwin
LONDON, Jan 27 (Reuters) - Oil prices edged fractionally
nearer to $75 a barrel on Wednesday after an unexpected drawdown
in U.S. crude stockpiles was counterbalanced by a firming
dollar.
U.S. oil for March delivery <CLc1> rose 9 cents to $74.80 a
barrel by 1015 GMT, after touching a five-week intraday low of
$73.82 on Tuesday. London ICE Brent for March settlement <LCOc1>
rose 2 cents to $73.31.
As investors await the outcome of a U.S. Federal Reserve
policy meeting later in the day, and the prospect of unchanged
interest rates, the dollar was trading close to four-month highs
against a basket of currencies <.DXY>.
"The market's focus has shifted to the U.S. The 2-day
meeting of the Federal Open Market Committee will end today and
it is largely expected that the record-low interest rate policy
will be continued," said David Wech at JBC Energy in Vienna.
U.S. crude inventories unexpectedly dropped by 2.2 million
barrels last week as imports fell by 1.5 million bpd to 8.31
million bpd, according to the American Petroleum Institute's
weekly report.[]
Inventories had been expected to gain 1.4 million barrels, a
Reuters poll showed.[]
"The API report was mixed and will not help the market to
move out of its current lethargy," said independent oil analyst
Olivier Jakob at Petromatrix.
U.S. distillate inventories, a fuel category that includes
heating oil and diesel, fell by 2 million barrels versus an
expected 1.7 million-barrel decrease. Gasoline stocks grew by
916,000 barrels, less than the 1.1-million gain forecast.
"The drop in imports and reduction of U.S. Gulf crude stocks
needs to be attributed to short-term weather delays and should
translate into larger-than-expected builds in weeks to come,"
Jakob said.
Traders on Wednesday await the release of government
inventory statistics from the Energy Information Administration
(EIA) at 1530 GMT.[]
MARKET JITTERS
The Industrial and Commercial Bank of China (ICBC), the
country's largest bank, said it has stopped rolling over some
loans in order to slow credit growth after a surge at the start
of the year.[]
In its mid-January report, the International Energy Agency
pegged China's 2009 oil demand growth at 572,000 barrels per
day, a rise of 7.2 percent. Analysts see the ICBC's surprise
loan curbs as prudent steps and conducive to sustainable growth.
"We expect refined fuel demand to increase around 7.5
percent from a year earlier...up from a rise of around 2.7
percent in 2009," said Gong Jinshuang, a market researcher with
top energy group CNPC.[]
Lending curbs and steps by the central bank to mop up some
of the cash sloshing around in the banking system have weighed
on global investor sentiment, driving Chinese stocks to a
three-month low and also hitting overseas markets.
However, Chinese officials have made clear that they do not
want to freeze lending, only to see banks lend more evenly to
avoid the kind of surge that now seems to be occurring.
(Additional reporting by Alejandro Barbarosa in Singapore
and Aizhu Chen in Beijing, editing by William Hardy)
