* U.S. crude stocks down 3.9 million barrels to 326.7mbbl
* Crude oil stockpiles fall, distillates rise
* 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 fell towards $74 a
barrel on Wednesday, pressured by mixed U.S. data on crude and
distillate inventories and a stronger dollar.
U.S. oil for March delivery <CLc1> fell 1 cent to $74.70 a
barrel by 1613 GMT, after touching an intraday low of $73.90.
London ICE Brent for March <LCOc1> rose 11 cents to $73.40.
U.S. crude oil stockpiles fell unexpectedly by 3.9 million
barrels last week while distillates showed a surprise gain,
Energy Information Agency data showed. []
Analysts attributed the crude oil stockpile draws to
weather-related delays in the Gulf of Mexico.
"It is the same case week after week. The products number is
much higher than expected," said senior commodities analyst Mike
Zarembski at Optionsxpress in Chicago.
U.S. crude imports fell 673,000 barrels per day to 7.87
million bpd, the EIA reported. Oil has fallen from above $83 a
barrel on Jan. 11.
"After a $10 decline in crude prices the most we can get
after a bigger-than-expected crude draw is a few-cents rally,
and that shows you how weak the market is right now," Zarembski
said.
Gasoline stocks rose more than expected in the week to Jan.
22 by 2.0 million barrels to 229.4 million barrels versus an
expected rise of 1.1 million barrels.
"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,"
said independent oil analyst Olivier Jakob at Petromatrix.
DOLLAR UP
The dollar rose to a six-month high against the euro on
persistent worries over Greece's fiscal health and as investors
awaited 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.
The Federal Open Market Committee concludes a two-day
meeting at about 1915 GMT on Wednesday, with interest rates
widely expected to be left at near zero and investors eager to
glean the accompanying statement for any changes in sentiment.
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)
