* Oil rises as U.S. crude stocks fall, gasoline rises
* Iran test fires 9 missiles
* Global diesel tightness supports
(Updates throughout, changes dateline from LONDON)
NEW YORK, July 9 (Reuters) - Oil rose on Wednesday on
supply concerns and news that Iran conducted missile tests,
deepening tensions between the OPEC nation and the West.
U.S. crude <CLc1> rose 54 cents to $136.58 a barrel by 1738
GMT, off highs of $138.28 and countering two days of losses
that lopped more than $9 off prices. London Brent crude <LCOc1>
gained 87 cents to trade at $137.30 a barrel.
U.S. crude stocks fell by 5.9 million barrels last week,
more than triple analyst forecasts, with the draw largely along
the West Coast, according to the U.S. Energy Information
Administration. []
"It is a very bullish report with a little bearish news
hidden in there," said Rob Kurzatkowski, futures analyst at
optionsXpress in Chicago. "Gasoline is the weak link in the
chain."
U.S. gasoline stockpiles rose unexpectedly as high fuel
prices continued to clip demand in the world's top consumer.
U.S. demand for oil products fell 1.8 percent over the past
four weeks compared with year-ago levels. Gasoline demand,
which usually rises during the summer holiday months, fell 2.1
percent.
Oil prices have jumped over 40 percent this year on supply
struggling to keep pace with rising demand in emerging
countries like China, rising cash flows from investors seeking
to hedge against inflation and the weak dollar and growing
tensions between Iran and Israel.
Growing demand for diesel across the globe added support on
Wednesday.
"The concerns over global distillate supplies remain,
despite the recent trend of building inventories in the U.S.,"
said John Kilduff, senior vice president at MF Global in New
York.
Fresh concerns over supplies surfaced after Libya said its
output would fall by about 100,000 barrels per day starting in
the next few days due to maintenance on a pipeline.
[]
Crude rallied more than $2 earlier after Iran said it had
test-fired missiles, escalating ongoing tensions with the West
over Tehran's nuclear program.
Iran's state media reported the test-firing of nine long
and medium-range missiles, including one Tehran has previously
said could reach Israel and regional U.S. bases. []
Iran, the second-largest oil producer in the Organization
of the Petroleum Exporting Countries, says its nuclear program
is for power generation, whereas the West fears it is aimed at
making bombs.
Amid an escalating war of words with Israel, an aide to
Iran's Supreme Leader was quoted on Tuesday as saying that Iran
would hit Tel Aviv, U.S. shipping in the Gulf and American
interests around the world if attacked. []
(Reporting by Matthew Robinson, Gene Ramos and Robert Gibbons
in New York, Santosh Menon in London and Angela Moon in Seoul;
Editing by Christian Wiessner)
