* Oil recoups some losses after five days of declines
* API data shows surprise decrease in U.S. crude stocks
* Saudi oil minister calms worries over Gulf economies
(Updates throughout)
By Christopher Johnson
LONDON, Dec 9 (Reuters) - Oil rose more than $1 towards $74
a barrel on Wednesday, rallying after several days of falls, on
industry data showing a big drop in U.S. crude stocks and on a
weaker U.S. dollar <.DXY>.
The American Petroleum Institute (API) said in a report late
on Tuesday that crude inventories in the world's top oil
consumer fell 5.8 million barrels last week, bucking
expectations for a rise, as refiners boosted fuel production.
U.S. crude for January delivery <CLc1> was up $1.11 per
barrel at $73.73 by 1027 GMT, having hit an earlier high of
$73.85. The contract fell $1.31 on Tuesday.
NYMEX crude, which hit its lowest level since late November
at $72.43 on Monday, has lost more than 7 percent this month.
London Brent crude <LCOc1> gained 82 cents to $76.01.
Losses over the last five days have been partly driven by a
recovery in the dollar. Oil is priced in dollars so a rise in
the currency makes fuel more expensive to most consumers.
The dollar <=USD> index against major currencies <.DXY> was
down 0.3 percent in early London trade on Wednesday.
For a graphic showing the oil and dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
"The oil market is seeing a correction after several days of
heavy falls," said David Wech, head of energy studies at JBC
Energy in Vienna. "The inventory data is clearly a factor."
"CALM"
The oil market also received some support from Saudi Oil
Minister Ali al-Naimi, who said Gulf economies were strong
despite anxieties over financial strains in the region, easing
fears Dubai's debt problems would hamper 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.
[]
The API data on Tuesday showed U.S. gasoline inventories
fell by 753,000 barrels, while distillates, which include
heating oil and diesel, rose by 1 million barrels. []
However, crude oil stocks at Cushing, Oklahoma, the delivery
point for oil futures traded on NYMEX, rose 1.5 million barrels,
helping 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
Analysts say they expect the contango to deepen further over
the next few weeks with no return to backwardation until well
into 2010 as U.S. oil demand stays relatively weak.
Further pointers on U.S. stockpiles will come from weekly
Energy Information Administration (EIA) data due later on
Wednesday. An expanded Reuters poll has forecast a
600,000-barrel rise in U.S. crude oil stocks.
U.S. crude oil futures surged to a year high of $82 per
barrel in October, from below $33 last December.
(Additional reporting by Ramthan Hussain in Singapore; editing
by William Hardy)
