(Corrects year in seventh paragraph)
* Market continues to seek support amid bearish
fundamentals
* U.S. crude, distillate stocks up, as demand weak
* Economic recovery still seen patchy
By Ramthan Hussain
SINGAPORE, Sept 30 (Reuters) - Oil edged up to $67 a barrel
on Wednesday, recovering from the previous day's losses as the
dollar weakened against the euro and resource currencies like
the Australian dollar.
This allowed crude to reverse losses from the previous day,
when U.S. crude and distillates stock builds, a downgrade to
U.S. energy demand and low consumer confidence data continued a
string of bearish signals that has put crude on course for its
first quarterly fall this year.
Not all news has been negative, with U.S. house prices
rising for a third month, while a Chinese purchasing managers
index for September released on Wednesday showed strong growth
continues in the world's second-largest oil consumer.
U.S. crude futures <CLc1> rose 29 cents to $67.00 a barrel
by 0244 GMT, after shedding 13 cents on Tuesday. London Brent
crude <LCOc1> gained 33 cents to $65.82 a barrel.
The markets are quiet ahead of China's week-long holidays.
"Looking at the fundamentals, it is not justifiable for
prices to be at current (strong levels)," said Tetsu Emori, a
fund manager at Tokyo-based Astmax Co Ltd, adding that
investment funds hold the view that $60 oil is cheap.
He said that despite better economic conditions in 2006,
oil prices were still ranging around the $60-70 levels seen
recently.
Slowing demand in the United States and other developed
economies after the financial crisis pulled down crude from
records near $150 a barrel in July 2008 to below $33 a barrel
in December, although hopes of an economic rebound have since
lent support.
Although U.S. economic numbers are improving, the
government's Energy Information Administration (EIA) still
revised down its July estimates for oil demand by 133,000
barrels per day (bpd) to 4 percent below year-ago levels, the
lowest July level in 13 years.
Also, U.S. crude stocks jumped a hefty 2.8 million barrels
last week and distillates, which include heating oil and
diesel, rose 2.3 million barrels, American Petroleum Institute
data showed. Gasoline stocks fell 1.7 million barrels.
[]
The EIA data will be out later on Wednesday. A Reuters poll
forecast a 600,000-barrel rise in crude stocks, as weak margins
pressured refinery demand; a 1.2 million-barrel build in
distillates and a 1.0 million-barrel increase in gasoline
inventories. []
The mixed economic data from the U.S. showed that the
economic rebound is still in its early days following the worst
recession in decades, and it could be a long time before
consumers contribute to growth, analysts said.
Tensions between the West and OPEC-member Iran over
Tehran's nuclear programme continue to be on traders' radars,
as the White House weighed sanctions targeting Iran's
dependence on gasoline imports and insurance firms that
underwrite the trade. []
(Editing by Michael Urquhart)
