* Obama pledges to double U.S. exports in five years
* U.S. distillate demand drops more than 8 percent
* Dollar retreats from 6-month high vs euro
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Jan 28 (Reuters) - Oil rose towards $74 on
Thursday, rebounding from six-week lows, after U.S. President
Barack Obama's State of the Union address and the Fed's
decision to maintain low interest rates revived some confidence
over economic growth.
Obama promised Americans he would prioritise job creation
and curb exploding deficits in a speech to Congress that also
took a more moderate tone on rules for U.S. banks. He also
pledged to double exports within the next five years.
[]
"Once President Obama comes out with more details about his
plans for reform of the U.S. banking sector, stock markets
could turn around and that would be bullish for oil," said Ben
Westmore, a commodities analyst at the National Australia Bank.
U.S. crude for March delivery <CLc1> rose 20 cents to
$73.87 by 0734 GMT. On Wednesday it touched $72.65, the lowest
intraday price since Dec. 14. Prices have dropped 12 percent
from a 15-month peak near $84 on Jan. 11. []
London ICE Brent crude <LCOc1> for March settlement gained
14 cents to $72.38 a barrel.
In his speech, Obama revealed no concrete plans to limit
risk-taking by banks, easing concerns about new regulation.
The President's announcement last week that he would seek
sweeping reforms to curb risky lending by banks spooked
financial markets, prompting investors to unwind some trades in
commodities and energy markets.
Earlier on Wednesday, the Fed said it intended to end some
emergency lending and asset-buying programmes and sounded
slightly more upbeat on the U.S. economy. []
AMPLE INVENTORIES
A prior government report showed a larger-than-expected
gain in U.S. gasoline stockpiles and a surprise increase in
distillates, a category that includes heating oil and diesel.
The gains came even as refiners kept processing rates at
historically low levels.
"There is really no indication that refiners are expecting
demand to pick up any time soon," Westmore said from Melbourne.
The Energy Information Administration (EIA) said U.S. oil
demand shrank by 2 percent in the four weeks to Jan. 22 from a
year earlier, when the U.S. economy was hitting the bottom of
its cycle, according to Harry Tchilinguirian, head of
commodities research at BNP Paribas in London.
"For now, freight indicators are not showing any tangible
improvement that would suggest merchandise is once again moving
and re-stocking by businesses is taking place," Tchilinguirian
wrote.
Distillate use fell more than 8 percent over the past four
weeks, the EIA report showed. []
"If you look at January last year, to fall from that level
is quite concerning," Westmore said.
The market shrugged off an unexpected 3.9-million barrel
drop in U.S. crude inventories as imports plunged to below 8
million bpd.
"The fall in the crude stockpiles was partially associated
with a decline of imports rather than with increased demand,"
Westmore added.
Crude stockpiles at Cushing, Oklahoma, the pricing point
for U.S. benchmark WTI crude, contracted by 700,000 barrels,
the IEA said.
Refinery utilisation in the United States, or the
proportion of capacity at which plants operate, was little
changed at 78.5 percent, close to the lowest in 25 years for a
period outside the hurricane season.
Still, gasoline stocks climbed 2 million barrels, compared
with forecasts for a 1.1-million-barrel gain, while distillates
unexpectedly rose 400,000 barrels.
The Sabine-Neches waterway that serves several oil
refineries near Port Arthur, Texas, has been partially reopened
to tanker traffic after a leaking tanker ship was removed from
the channel, the U.S. Coast Guard said on Wednesday.
[]
China's state economic planning agency sees global crude
oil prices averaging around $80 a barrel this year, up from
2009, the official Xinhua news agency said, a level deemed
conducive to both refiners and oil producers. []
(Editing by Clarence Fernandez)
