* Awaits EIA inventory report due later
* US economic data due later could confirm rebound
* Cold weather-driven price rally seen continuing
(Updates prices, previous SINGAPORE)
LONDON, Jan 6 (Reuters) - Oil snapped a nine-day winning
streak on Wednesday, staying under $82 a barrel after industry
data showed a surprise rise in U.S. distillate inventories last
week even though heating oil supplies fell.
U.S. crude for February delivery <CLc1> fell 6 cents to
$81.71 a barrel by 0900 GMT, after settling up 26 cents on
Tuesday at $81.77, its highest closing level since early October
2008. London Brent crude <LCOc1> eased 10 cents to $80.49.
Cold weather in the United States, Europe and parts of Asia
boosted demand for heating fuel, pushing crude to its highest
settlement in nearly 15 months on Tuesday.
But sentiment was dented after data from the American
Petroleum Institute (API), released after the market's close on
Tuesday, showed U.S. distillate supplies rose 962,000 barrels
last week, against expectations for a 1.9 million barrel drop.
[]
On Wednesday markets will look to weekly inventory data from
the Energy Information Administration (EIA) for further clues on
the outlook for demand from the world's top energy user.
U.S. employment data and a gauge of December
non-manufacturing activity, also scheduled for release on
Wednesday, could confirm that the world's largest economy is on
a road to recovery, however patchy. []
"The market's biggest worry right now is the U.S. inventory
levels, but overall, I think the firm tone can be sustained, and
we should see a range of $75-$85 in the near term," said Keiichi
Sano, general manager of research at SCM Securities in Tokyo.
"The rally has been driven by cold weather, and this will
continue for the next one to two weeks. We're seeing covering of
speculative short positions after the cold snap set in."
WINTER CHILL
Frigid temperatures in the United States were expected to
boost the country's heating demand to 21 percent above normal,
with consumption in the U.S. Northeast -- the largest heating
oil market -- seen 11 percent above average levels.
[]
Reflecting the boost from the cold, the NYMEX February
heating oil <HOc1> contract is hovering near 15-month highs. It
eased slightly to $2.1853 on Wednesday, after settling on
Tuesday up 0.16 percent at $2.1941, its highest close since Oct.
20, 2008.
API data unveiled on Tuesday showed U.S. heating oil stocks,
a major part of distillates, fell 1.3 million barrels for the
week to Jan. 1, while crude stocks fell a larger-than-expected
2.3 million barrels. Gasoline inventories, however, jumped 5.6
million barrels.
Investors are also watching for further developments between
Russia and Belarus after an oil dispute saw Russia briefly cut
off supplies to the Eastern European nation.
Belarus sent a delegation to Moscow on Tuesday for talks to
resolve the dispute that has raised the spectre of winter supply
problems for the European Union. [] []
(Reporting by Chris Baldwin in London and Jennifer Tan in
Singapore; editing by James Jukwey)
