* Oil recoups some losses from 5 days of declines
* API data shows surprise decrease in U.S. crude stocks
* Saudi oil minister calms worries over Gulf economies
(Updates prices, Saudi remarks, comments on contango)
By Ramthan Hussain
SINGAPORE, Dec 9 (Reuters) - Oil climbed above $73 on
Wednesday, after falling more than $1 the previous day,
supported by industry data showing a big drop in U.S. crude
stocks and Saudi Arabia's assurance over the strength of Gulf
economies.
Crude inventories in the world's top oil consumer fell 5.8
million barrels last week, bucking expectations for an
increase, as refiners boosted fuel production, the American
Petroleum Institute (API) said.
U.S. crude for January delivery <CLc1> rose 64 cents to
$73.26 a barrel by 0611 GMT, after falling $1.31 on Tuesday.
NYMEX crude, which hit its lowest level since late November at
$72.43 the previous session, has lost 7.3 percent since prices
last rose on Dec. 1.
London Brent crude <LCOc1> gained 47 cents to $75.66.
The last five days' losses are the largest since prices
fell 7.9 percent on Sept. 23 and Sept. 24, partly driven down
by the recovery in the dollar.
"The draw in crude stocks is huge, even though oil imports
have been rising," said Tetsu Emori, a fund manager at
Tokyo-based Astmax Co Ltd. "Refining rates were up 1.3
percentage points and we could be seeing the first signs of a
recovery in fuel demand in the United States."
The oil market was also cheered by Saudi Oil Minister Ali
al-Naimi's remarks that Gulf economies are strong despite
anxieties over financial strains in the region, easing fears
that Dubai's debt problems would hamper the global economic
recovery.
"The soundness and growing diversification of our regional
economy will help restore calm following the turbulence of the
moment," he told a petrochemicals conference in Dubai.
[]
OVERALL STOCKS STILL HIGH
API data also showed gasoline inventories fell 753,000
barrels, while distillates, which include heating oil and
diesel, rose 1 million barrels. []
However, crude stocks at Cushing, Oklahoma, delivery point
for oil traded on NYMEX, rose 1.5 million barrels, up steadily
for several weeks and helping to push down the price of
front-month crude futures, creating the deepest front-month
discounts since August.
For graphic showing steepening of the forward curve,
click:
http://graphics.thomsonreuters.com/129/CMD_NYOIL21209.gif
"We do not expect blow-outs in the WTI spreads like those
we witnessed in early 2009 as a result of capacity limitations
at Cushing and high financing costs," Harry Tchilinguirian
senior analyst with BNP Paribas said in a report.
"We do see, however, contango persistence for some time to
come," he said. "A return to backwardation in crude oil seems
more plausible over the second half of 2010 when economic
growth will be stronger, oil inventories lower and OPEC spare
production capacity reduced."
Further pointers on U.S. stockpiles will come from the
weekly Energy Information Administration (EIA) data due later
on Wednesday, with an expanded Reuters poll calling for a
600,000-barrel rise in crude stocks.
Oil has surged to a high for the year of $82 in October,
from below $33 last December, and Wednesday's price rebound was
limited by the firm U.S. currency.
The dollar index hit a one-month high of 76.331 <.DXY>
<=USD> in early Asian trade before easing back by 0.2 percent,
and the euro fell to a one-month low versus the greenback, as
investors sold positions in riskier assets ahead of the
year-end, partly due to rising debt problems for Greece and
Dubai.
The firm U.S currency makes dollar-denominated commodities
more costly for holders of other units, and pressured gold,
which made some gains on Wednesday but hovered near three-week
lows, while Asian equities fell on fears over the spluttering
recovery. [] []
For graphic showing the oil and dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
(Editing by Clarence Fernandez)
