* U.S. crude stocks unexpectedly fall 4 million barrels
* Gold hits record high on weak dollar
* FOMC meeting statement eyed
(Updates throughout, changes dateline from LONDON)
NEW YORK, Nov 4 (Reuters) - Oil rose on Wednesday to top
$80 a barrel after government data showed an unexpected decline
in U.S. crude inventories.
U.S. crude for December <CLc1> traded up 84 cents to $80.44
a barrel by 12:47 EST (1747 GMT), after settling up $1.47 on
Tuesday. Brent crude <LCOc1> rose 82 cents to $78.93 a barrel.
Data from the U.S. Energy Information Administration showed
a 4 million barrel decline in crude inventories in the world's
biggest consumer in the week to Oct. 30, countering analyst
expectations for a build. []
The draw helped lift oil markets, which have been eager for
found support this year from signs of a turnaround in both the
economy and fuel demand, which has been battered by the
recession.
Analysts cautioned the EIA report was not all bullish,
explaining much of the crude draw was due to a drop in refinery
runs as companies cut back production and import less crude due
to weak demand and poor margins. []
"The crude drop has boosted the market, but the report
can't be seen as too bullish. The fact is refinery rates
dropped more than a percent and we still didn't see a major
drop in product inventories," said Gene McGillian, analyst at
Tradition Energy, Stamford, Connecticut.
"Refiners don't see the need to push through more crude,
because demand hasn't been recovering at the pace that some
expected."
Gasoline stockpiles fell by 300,000 barrels last week,
against expectations for a slight build, while distillate
inventories dropped 400,000 barrels, according to the EIA.
Industry group the American Petroleum Institute said late
on Tuesday that U.S. crude oil stocks fell 3.3 million barrels
as imports dropped in the week to Oct. 30, versus expectations
for a 1.4 million-barrel rise.
Gold hit a record high above $1,095 per ounce as the dollar
weakened and after the International Monetary Fund's 200-tonne
sale of gold to India's central bank enhanced sentiment towards
the metal. []
Wall Street jumped, with the Dow and S&P 500 up more than 1
percent, on positive data about the services sector and
employment as investors awaited the Fed's assessment of the
economic recovery. []
The U.S. Federal Reserve ends its two-day meeting on
Wednesday and, while it is expected to keep rates unchanged,
there is speculation it might drop or alter its pledge to keep
rates low for an "extended period," even as signs of a recovery
mount. [] The fed statement is expected at 2:15 p.m.
EST (1915 GMT).
Analysts warned that oil prices could suffer losses if
there are any signs in the Federal Reserve's statement that
monetary policy is going to be squeezed.
Investors have put cash into commodities this year as a
hedge against inflation, helping to lift oil prices from below
$33 a barrel in December 2008.
"If there is any hint of tightening, hang on to your hats.
Few believe that the real economy has yet caught alight
sufficiently to remove the oxygen," brokers PVM said in a
research note.
Oil also drew support from the dollar, which fell against a
basket of currencies on Wednesday <<.DXY>. A weaker dollar
makes commodities like oil cheaper for those holding other
currencies.
(Reporting by Matthew Robinson, Robert Gibbons and Gene Ramos
in New York; Joe Brock and Alex Lawler in London; Editing by
Marguerita Choy)
