* 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
(Updates prices)
By Chris Baldwin
LONDON, Jan 27 (Reuters) - Oil prices eased towards $74 a
barrel on Wednesday, under pressure from a firmer dollar,
although the previous day's news of an unexpected drawdown in
U.S. crude stockpiles continued to offer support.
U.S. oil for March delivery <CLc1> fell 19 cents to $74.52 a
barrel by 1410 GMT, after touching a five-week intraday low of
$73.82 on Tuesday. London ICE Brent for March <LCOc1> fell 18
cents to $73.11.
The dollar was trading close to four-month highs against a
basket of currencies <.DXY>, as investors awaited the outcome of
a U.S. Federal Reserve policy meeting later in the day, and the
prospect of unchanged interest rates.
A stronger dollar makes commodities priced in the U.S.
currency more expensive for those holding other currencies.
"We've established quite a good base, and the only bullish
thing out there are the crude stocks from the API," said broker
Christopher Bellew at Bache Financial in London.
U.S. crude inventories unexpectedly fell 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. []
"We've fallen a long way, and bumped along at around $72,
and I think we are gradually starting to recover," Bellew said.
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 had 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 Anthony Barker)
