Oil rebounds towards $61 after fall on bearish inventories

                                
 * Oil rebounds after lowest close in seven weeks
                                
 * U.S. distillates stocks at highest level in nearly 25 yrs
                                
 By Maryelle Demongeot
                                
 SINGAPORE, July 9 (Reuters) - Oil rebounded towards $61 a
barrel on Thursday, correcting from a seven-week low hit on
bearish oil data that outlined continued weak demand amid
growing concerns about the pace of economic recovery.
                                
 A larger-than-expected rise of 3.7 million barrels in U.S.
distillates stocks last week left them at close to a 25-year
high, data from the Energy Information Administration (EIA)
showed, underlining weak demand for industrial transportation
fuels. [EIA/S]
                                
 U.S. light crude for August delivery <CLc1> rose 56 cents a
barrel to $60.70 by 0230 GMT, having lost more than 4 percent
on Wednesday to settle lower for the sixth day in a row, its
longest losing streak since mid-December, at $60.14.
                                
 London Brent crude <LCOc1> gained 57 cents to $61.
                                
 "It's no more than a mild correction from the earlier
decline that reflected the EIA report," said David Moore,
commodity analyst with the Commonwealth Bank of Australia.
                                
 But he did not expect prices to fall much further, he
added.
                                
 "There are still concerns about the outlook for demand,
particularly in the U.S. But much of the possible decline in
oil prices has already happened. If we did dip below $60, you
would probably see some people who might see it as a buying  
opportunity," Moore said.
                                
 The EIA also reported a large 1.9-million-barrel rise in
gasoline stocks, against a forecast for a lower 600,000 barrels
build, ahead of the July 4 Independence Day holiday weekend,
when summer travel traditionally peaks, suggesting reduced
travel due to the economic crisis.
                                
 Oil prices have fallen some 18 percent from this year's
high of $73.38 hit in late June, more than double this year's
lows at below $34 hit in February, as hopes that world
economies were on the brink of a quick economic recovery have
petered out.
                                
 The fragile state of the global economy dominated the first
day of the annual G8 summit, with the United States, Japan,
Germany, France, Britain, Italy, Canada and Russia
acknowledging there were still significant risks to financial
stability. [ID:nL8725739]
                                
 OPEC's 2009 World Oil Outlook added to the gloom as it said
world demand for oil may take years to recover from the slump
in 2009 because of economic weakness and demand destruction.
                                
 The Organization of the Petroleum Exporting Countries
(OPEC) said consumption of its crude would not return to 31
million barrels per day (bpd), the level it averaged in 2008,
until 2013. [ID:nL8624047]
                                
 OPEC Secretary-General Abdullah al-Badri said on Wednesday
oil prices -- now trading just above $60 per barrel -- were
"comfortable", but were still below the $75 a barrel the
producer group said at its May meeting could be achieved this
year. [ID:nL8256539].
 (Reporting by Maryelle Demongeot; Editing by Clarence
Fernandez)