Oil steadies below $70 ahead of EIA stocks data, Fed meet

                                
 * Oil steadies after four days of losses
                                
 * Awaits EIA data; to show higher crude, lower gasoline
stocks
                                
 * U.S. Fed Reserve meeting ends on Wed
                                
 By Maryelle Demongeot
                                
 SINGAPORE, Aug 12 (Reuters) - Oil steadied below $70 on
Wednesday after four consecutive days of losses as the market
waited for a second set of U.S. inventory data and kept an eye
on the outcome of the U.S. Federal Reserve's two-day meeting.
                                
 Weekly stocks data from the American Petroleum Institute
(API) showed an unexpected fall of 1.4 million barrels in crude
stocks, together with a larger-than-expected 2.3 million
barrels fall in gasoline stocks. [EIA/S]
                                
 But the data, released after Tuesday's prices settlement,
failed to lift the market, which tracked losses on equity
markets after doubts over the strength of the U.S. economic
recovery resurfaced.
                                
 U.S. light crude for September delivery <CLc1> rose 9 cents
to $69.54 a barrel by 0223 GMT, having lost $1.15 on Tuesday on
Wall Street losses and after the Energy Information
Administration (EIA) revised lower its global oil demand
forecast.
                                
 London Brent crude <LCOc1> fell 6 cents to $72.40.
                                
 "Today traders will be watching the Fed meeting and the EIA
data. The stronger dollar and waning sentiment for equities
have been short-term bearish for crude, which has been trading
as an asset class recently," said Jonathan Kornafel, Asia
director of U.S.-based Hudson Capital Energy.
                                
 The Energy Information Administration (EIA) will release
its own weekly inventory data at 1430 GMT.
                                
 Data from the EIA and API can diverge widely.
                                
 An expanded Reuters poll of analysts on Tuesday showed
expectations of a 700,000 barrels rise in crude stocks, 1.3
million barrels increase in gasoline stocks and a 200,000
barrels drop in distillates stocks.
                                
 Traders will also keep a close eye on the two-day U.S.
Federal Reserve meeting that ends later on Wednesday with a
statement expected at about 1815 GMT.
                                
 The Fed is expected to give a nod to signs the U.S.
recession is waning but will likely warn that the recovery will
be slow and dampen any expectations it will soon start to raise
interest rates. [ID:nN10470294]
                                
 Optimism after the U.S. unemployment rate eased in July to
9.4 percent from 9.5 percent in June turned sour on Tuesday
when the U.S. Commerce Department reported that wholesale
inventories plummeted 1.7 percent in June, and investors
worried that businesses were running as lean as possible
because of doubts about an economic recovery. [ID:nN11520426]
                                
 The decline, nearly double analyst expectations and the
10th straight monthly drop, pushed inventories to their lowest
level in more than two years and weighed on U.S. equity
markets. [.N]      Adding to the gloom, the U.S. Energy
Information Administration cut its 2009 oil demand forecast,
predicting consumption would fall by 1.71 million barrels per
day this year, compared with previous estimates of a
1.56-million bpd drop. [ID:nN11350532]
                                
 On its part, the Organization of the Petroleum Exporting
Countries anticipated that the slow recovery in global
consumption and rival oil supplies would shrink demand for its
crude next year. [ID:nLB30844]
                                
 Paris-based International Energy Agency (IEA) will release
its closely watched oil monthly report later on Wednesday.
 (Editing by Clarence Fernandez)