* Large drawdown in US crude, distillate stocks buoys
prices
* Weekly jobless claims could confirm US recovery on track
* Colder weather f'casts in eastern US could support prices
By Jennifer Tan
SINGAPORE, Dec 17 (Reuters) - Oil rose for a third session
to above $72 a barrel on Thursday, buoyed by a surprisingly
large drawdown in U.S. crude and distillate stockpiles, easing
worries over flagging demand in the world's top energy user.
Crude has risen for three days in a row after a
nine-session rout, in which prices plummeted 11.3 percent from
levels above $78 a barrel. Analysts attributed the fall to
persistently poor fuel demand and bloated U.S. oil inventories.
A report from the U.S. Energy Information Administration on
Wednesday showed crude inventories declined by 3.7 million
barrels last week, eclipsing analyst forecasts for a more
modest draw of 1.8 million barrels.
A 2.9-million-barrel draw in U.S. distillate stocks, which
include heating oil and diesel, was almost five times bigger
than the 600,000-barrel dip analysts expected, while gasoline
stocks grew less than expected. []
Crude for January delivery <CLc1> rose 6 cents to $72.72 a
barrel by 0220 GMT, after settling up $1.97 a barrel at $72.66
on Wednesday. London Brent crude <LCOc1> was up 16 cents at
$74.45.
"Inventory was the single issue that was dragging down the
market -- there's no question about it," said Tony Nunan, risk
manager with Tokyo-based Mitsubishi Corp.
"The economy may not be falling any more, but we're not out
of the woods yet -- we still have a lot of inventory and fuel
demand remains anaemic. We're going to see this pattern of
volatility in prices, with swings determined by inventory
levels."
A further drawdown in distillate stockpiles could be on the
cards, after a 10-day National Weather Service forecast earlier
this week called for lower-than-normal temperatures in most of
the eastern United States, the world's biggest regional
consumer of heating oil.
Economic data unveiled this week appears to have placed the
United States on track for a gradual recovery. Weekly jobless
claims, due later, are expected to confirm a brightening
outlook for the world's largest economy.
Economists forecast a total of 465,000 new filings for
jobless benefits for the week ended Dec. 12, down from 474,000
in the prior week.
The U.S. Federal Reserve opted on Wednesday to hold
interest rates near zero amid "subdued" inflation risks, and
said rates should remain exceptionally low for an extended time
to help spur an economic recovery. []
The U.S. dollar retained its strength on Thursday,
steadying against the yen and hitting its highest level in
three months against the euro, after the Federal Reserve voiced
some optimism about a stabilising economy. []
On the supply front, the Organization of the Petroleum
Exporting Countries, whose daily production meets around a
third of global crude demand, will convene in Angola to discuss
output policy on Dec. 22.
Few expect OPEC to scale back the 4.2 million barrels a day
output cuts the group has agreed upon since last year. Most
members are comfortable with the current range of oil prices.
(Editing by Michael Urquhart)
