* U.S. crude inventories fall, API says; price rises
* U.S. EIA raises 2010 world oil demand forecast
* Dlr on back foot, commodity currencies shine
(Updates prices, adds Asian stocks performance, refiles to add
dropped zero in stocks fall figure, 254,000 barrels, in fourth
paragraph)
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.
A second day of gains for Asian shares on growing confidence
in a strengthening global recovery gave oil prices an extra
lift.
U.S. crude for November delivery <CLc1> rose 52 cents to
$71.40 a barrel by 0655 GMT, adding to Tuesday's gains of 47
cents. London Brent crude <LCOc1> rose 61 cents to $69.17.
Wednesday's oil gains followed a report by the American
Petroleum Institute saying crude stocks fell 254,000 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 percent 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.
[]
Asian shares pushed up about 1.4 percent on Wednesday, with
Taiwan's benchmark index nearing a 16-month high, as growing
confidence about the global economic outlook boosted resource
and financial companies. []
However, the U.S. dollar was again under pressure, with gold
<XAU=> trimming some gains but still hovering near the all-time
high of $1,043.45 hit on Tuesday.
(Reporting by Fayen Wong; Editing by Michael Urquhart)
