* U.S. crude inventories fall, API says; price rises
* U.S. EIA raises 2010 world oil demand forecast
* Dlr on backfoot, commodity currencies shine
By Fayen Wong
PERTH, Oct 7 (Reuters) - Oil prices rose for the third day
and topped $71 a barrel on Wednesday, as an industry report
showing a small drawdown in U.S. crude stockpiles last week fed
optimism for a recovery in energy demand.
The stock market's effervescence, which boosted Japan's
Nikkei 1.2 percent on signs the global economy was recovering,
also gave oil prices an extra lift.
U.S. crude for November delivery <CLc1> rose 49 cents to
$71.37 a barrel by 0245 GMT, adding to Tuesday's gains of 47
cents. London Brent crude <LCOc1> rose 49 cents to $69.05.
Wednesday's oil gains followed a report by the American
Petroleum Institute saying crude stocks fell 254,00 barrels in
the week to Oct. 2, defying forecasts for a 2.2-million-barrel
increase in a Reuters poll of analysts. []
Distillate stocks fell 2.9 million barrels, countering
expectations for a 300,000-barrel build, while gasoline stocks
rose 544,000 barrels, against estimates for a
1.0-million-barrel increase.
The API report is seen as a precursor to the more
authoritative data issued by the U.S. Energy Information
Administration (EIA), which will be released at 10:30 am EDT
(1430 GMT) Wednesday.
The EIA also raised its global oil demand estimate by
170,000 barrels a day for the fourth quarter and said it
expected consumption to rise by 1.1 million bpd next year,
versus earlier expectations of a 910,00 bpd rise.
[]
Over the last two weeks, oil has rebounded from an 11-week
low of around $66 in late September back towards the $70-level,
but some analysts caution it could lose its footing in the near
term.
"Oil looks like it's on shaky ground as we approach the
U.S. third quarter reporting season. A lot of near term price
gains have been won off a rebounding equity market," said Mark
Pervan, a commodities analyst at the Australia & New Zealand
Bank.
"I suspect the third-quarter reporting card will struggle
to match the impressive second-quarter results, which were
mainly driven by one-off aggressive cost cutting."
After having jumped about 40 percent in the second quarter,
oil prices have squeezed out a gain of only 1 pct in the
September quarter, trading in a band of between $65-$75.
While the global economy is healing from its worst
financial crisis since the Great Depression, the economic
recovery, along with energy demand, is still fragile, analysts
have said.
A U.S. Federal Reserve official said on Tuesday that while
the U.S. economy was clearly rebounding, it was too soon to
begin to withdraw the Federal Reserve's massive support.
[]
The U.S. dollar was again under pressure on Wednesday as
investors added to long positions in commodity-linked
currencies such as the Australian and New Zealand dollars on
renewed optimism about a global recovery. []
Separately, Chevron Corp told Reuters in an interview that
global natural gas demand will begin to recover next year, but
prices in the United States could remain under pressure in the
medium term as ample supply weighs. []
(Reporting by Fayen Wong; Editing by Clarence Fernandez)
