UPDATE 3-Oil eases below $72 on demand doubts

                                
 * OECD July oil stocks up 4.6 pct year-on-year -IEA
                                
 * Dollar index hits lowest since Sept. 2008
                                
 * EIA said U.S. distillates and gasoline stocks rise
                                
 
                                
(Updates prices, background)
                                
 By Catherine Bosley 
                                
 LONDON, Sept 11 (Reuters) - U.S. crude oil slipped below $72
a barrel on Friday, after three days of gains, as investors
questioned whether the pace of demand recovery justified current
prices.
                                
 U.S. crude for October delivery <CLc1> was down 26 cents at
$71.68 a barrel by 1142 GMT. London Brent crude <LCOc1> fell 21
cents to $69.65 a barrel.
                                
 "The whole environment seems to be very positive but the
market needs at some point to take a step back and ask whether
these kinds of fundamentals are really supportive of these kinds
of prices," said Commerzbank analyst Eugen Weinberg.
                                
 Oil hit a year-high of $75 a barrel in late August, from
below $33 a barrel in December, as global oil demand recovered.
                                
 The International Energy Agency said it expected oil demand
to rise this year and next as the global economy recovers, but
also said oil stocks in the big developed countries of the OECD
were up 4.6 percent in July versus a year ago. [ID:nLA670199]
                                
 Weinberg said the IEA's oil stock data indicated that
crude's recent rally might not justify fundamentals and was
weighing on crude prices.
                                
 "(It's) also a question of current oil stocks world wide,
which are still at very high levels," he said.
                                
 The Energy Information Administration reported U.S. crude
inventories fell by a larger-than-expected 5.9 million barrels
last week.
                                
 But inventories of gasoline and middle distillates rose, and
analysts said the oil products supply build would probably
offset the bullish impact of the large crude draw.
[ID:nN10396471]

                                
 DOLLAR WEAKNESS
                                
 The dollar index <.DXY>, a measure of the U.S. unit's
performance against six other major currencies, was on track for
its steepest weekly decline in almost four months, briefly
falling as low as 76.548, its lowest since September 2008.
[ID:nLB612007]
                                
 The secretary-general of the Organization of the Petroleum
Exporting Countries, which met in Vienna this week, said the
falling dollar had become a concern for the group and could
necessitate higher oil prices. [ID:nLA728188]
                                
 The dollar's slide has helped crude gain more than 5 percent
so far this week, but an analyst at Commonwealth Bank said oil
was unlikely to get much more upward momentum from the
greenback.
                                
 "Our forecast for currencies is for dollar depreciation -- a
lot of that has occurred already and while depreciation has been
an upside driver, that influence may be weakening," said David
Moore, commodities strategist at Commonwealth Bank in Sydney.
                                
 Meanwhile, data on Friday showed China's crude oil imports
in August surged about 25 percent to a near record high of 19.6
million tonnes or around 4.6 million barrels. [ID:nBJK000012]
                                
 At its meeting in Vienna this week, OPEC kept output
unchanged, as many analysts had expected, but signalled
compliance with output curbs would become a greater focus.
[ID:nL9714113]
 (Additional reporting by Nick Trevethan in Singapore; Editing
by Anthony Barker)