* Gasoline stocks jump 2.9 mln barrels vs forecast +1 mln
* U.S. dollar strengthens, leading investors away from oil
* OPEC has no plans to raise oil production - Algeria
(Recasts and updates prices throughout.)
By Joshua Schneyer
NEW YORK, Oct 7 (Reuters) - Oil prices fell toward $69 a
barrel on Wednesday after U.S. data showed fuel stocks surged
last week in the world's biggest energy consumer, signaling a
recovery in oil demand may take more time.
A weekly report from the U.S. Energy Information
Administration (EIA) showed U.S. fuel stocks leapt in the week
through Oct. 2, with gasoline stocks up 2.9 million barrels, or
nearly triple the 1-million-barrel build expected by analysts
polled by Reuters.
Distillate stocks -- which include diesel and heating oil
-- rose by 700,000 barrels, more than double a predicted
300,000-barrel build. []
"The inventory numbers are wildly bearish, with crude
stocks 10 percent above a five-year average, gasoline 6.9
percent above average, and distillates 30.1 percent above
average levels" said Phil Flynn, analyst at PFGBest Research in
Chicago. "We still have major supply and demand issues."
U.S. crude for November delivery <CLc1> fell $1.29 to
$69.59 a barrel by 2:30 p.m. EDT (1603 GMT), after gaining in
the two previous days. London Brent crude <LCOc1> fell $1.27
cents to $67.29.
Oil has rebounded from an 11-week low of around $66 in
late September.
On the bullish side, the EIA reported a 1-million-barrel
draw in U.S. crude stocks last week, bucking analyst
expectations of a 2.2-million-barrel rise. It also said
petroleum product demand has recovered by 5 percent since the
same time last year, near the height of the financial crisis.
DOLLAR STRENGTH
Oil prices also fell as a strengthening dollar prompted
less investment in crude, which tends to hold its value or rise
when the greenback weakens, as it had in two previous days.
The dollar rose Wednesday, by 0.2 percent against a basket
of currencies <.DXY>, emerging from a 10-day low yesterday
against the euro and an eight-month low against the yen.
The dollar gained on optimism that third-quarter U.S.
corporate earnings reports, which began Wednesday, will show
signs of an economic rebound.
The dollar also gained as more oil producers denied a
report in Britain's Independent newspaper from Tuesday, which
said they were secretly planning to begin pricing oil in
currencies other than the dollar, a step that OPEC-member Iran
took earlier this year. []
Algerian oil minister Chakib Khelil, speaking at a gas
conference in Buenos Aires, said OPEC would not move away from
pricing crude in dollars any time soon, echoing similar denials
from oil producers Saudi Arabia and Russia on Tuesday.
"The dollar still remains the currency for commodities and
I hope still a reserve currency for a long time to come,"
Khelil told reporters.
He said the dollar may lose some of its appeal as a reserve
currency to other world currencies over the long-term.
[]
NO MORE OPEC CRUDE
Khelil also said that OPEC was unlikely to raise oil
output, which still outstrips demand, when the group next meets
in December.
By cutting its crude exports since late 2008, OPEC "has
managed to tighten up an oversupplied (oil) market," said Brad
Samples, an analyst at Summit Energy in Louisville, Kentucky.
Crude jumped to a record near $150 a barrel in July 2008,
but waning demand and oversupply later helped push oil prices
to near $33 a barrel by December, prompting OPEC to rein in
output.
Some analysts caution oil prices could slip further from
current levels soon if U.S. corporate earnings disappoint.
"Oil looks like it's on shaky ground as we approach the
U.S. third-quarter (corporate) 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.
U.S. equities mostly fell on Wednesday. <.SPI>
(Additional reporting by David Sheppard in London and Fayen
Wong in Perth; Editing by Christian Wiessner)
