* Market continues to seek support amid bearish
fundamentals
* U.S. crude, distillate stocks up, as demand weak
* Eyes on talks on Iran's nuclear plan on Thursday
(Updates prices, Iran talks)
By Ramthan Hussain
SINGAPORE, Sept 30 (Reuters) - Oil rose above $67 on
Wednesday, recouping day-ago losses as the U.S. dollar eased
against the euro and resource currencies like the Australian
dollar, while eyes are on talks over Iran's nuclear plans.
Prices fell on Tuesday due to builds in U.S. crude and
distillates stocks, a downgrade to energy demand and low
consumer confidence data, which continued a string of bearish
signals that has put crude on course for its first quarterly
fall this year.
Some bullish news emerged, 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.
And on Thursday, diplomats from the five permanent U.N.
Security Council members and Germany will meet Iran's nuclear
negotiator, the first talks on Tehran's disputed atomic
programme in more than a year, as the White House weighed
sanctions targeting the Islamic republic's reliance on gasoline
imports and insurance firms that underwrite the trade.
[]
U.S. crude futures <CLc1> rose 45 cents to $67.16 a barrel
by 0638 GMT, after shedding 13 cents on Tuesday. London Brent
crude <LCOc1> gained 41 cents to $65.90 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 took the view that $60 oil was cheap.
Slowing demand in the United States and other developed
economies after the financial crisis pulled crude down 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.
(Editing by Clarence Fernandez)
