* Oil prices shrug off mixed stock markets, focus on supply
* Traders eye Chinese trade, industrial output data for May
* For a technical view, click: []
* Coming Up: EIA inventory report; 1430 GMT
(Adds graphic on correlation with equities, comments on
demand)
By Alejandro Barbajosa
SINGAPORE, June 9 (Reuters) - Oil rose for a third day on
Wednesday, adding 0.7 percent after an industry report showed a
larger-than-expected decline in U.S. crude stocks, bolstering
the view that a glut will dwindle as demand resurges.
Inventories fell 4.5 million barrels last week, the
American Petroleum Institute said on Tuesday, more than four
times as much as expected. []
The supply report allowed the oil market to temporarily
shrug off moves in Asian equities, which fell on Wednesday.
Crude futures traders have adopted stock indices as a barometer
for perceptions on risk, growth and energy demand.
For a graphic on the correlation between oil and equities:
http://graphics.thomsonreuters.com/gfx/NT_20100906115841.jpg
U.S. crude for July delivery <CLc1> rose 51 cents to $72.50
a barrel at 0421 GMT, still down 17 percent from a 19-month
high above $87 in early May. July ICE Brent <LCOc1> was trading
almost at parity, up 15 cents at $72.45.
"The U.S. economy is certainly in recovery mode; oil
consumption seems to be recovering, with gasoline and
distillate fuel demand stronger," said David Moore, an analyst
at the Commonwealth Bank of Australia.
The Energy Information Administration (EIA) will publish
more closely watched government statistics on U.S. oil
inventories and demand on Wednesday at 1430 GMT.
The drop in U.S. crude inventories reported by the API was
matched by an equivalent increase in product supplies. Gasoline
stocks posted an unexpected increase of 1.5 million barrels and
distillates, including heating oil and diesel, logged a
larger-than-forecast gain of 3 million barrels.
ASIA STRENGTH OFFSETS EUROPE WEAKNESS
A report by Fitch Ratings that the Britain faced a
"formidable" fiscal challenge pushed European stocks to near
two-week closing lows on Tuesday, while Asian stocks also fell
on Wedneday. []
"The data flow is a little bit uneven and the market still
has a focus on developments in Europe. There is obviously
potential for fiscal difficulties," said Moore.
Adding to the uncertainty, U.S. Federal Reserve officials
on Tuesday gave conflicting signals on the direction of
interest rates, highlighting an increasingly important split
within the central bank. []
"Changes in market views about the economy will continue to
affect all risky markets, and commodities are no exception," JP
Morgan said in a report dated June 8.
"The key driver however is the strength of developing
market oil demand, with diesel demand increasing in line with
the recovery in global trade," the bank said.
"Crude oil demand will increase sharply in the coming weeks
as Asian refineries ramp up throughput as seasonal maintenance
comes to an end."
Chinese trade data for May, including oil statistics, will
be published on Thursday, followed by industrial production for
the same month on Friday, with growth forecast at 17.1 percent
in a Reuters survey, down from a 17.8 percent gain in April.
"The Chinese data could be quite market moving," Moore
said. (Editing by Michael Urquhart)
