* Oil could break four-day falling streak
* International Energy Agency revises demand estimate
* EIA data shows large crude stock rise in U.S.
* Dollar slips versus euro and yen
(Updates prices)
By David Sheppard
LONDON, Aug 12 (Reuters) - Oil rose back above $70 a barrel
on Wednesday as equity markets climbed, but concerns about the
strength of demand and a jump in U.S. crude inventories kept
gains in check.
U.S. light crude for September delivery <CLc1> rose $1.03 to
$70.48 a barrel by 1509 GMT, having fallen for the previous four
sessions. U.S. crude hit a near two-week low of $68.84 in early
trade on Wednesday, before rebounding strongly.
London Brent crude <LCOc1> rose 56 cents to $73.02.
Traders said oil prices continued to track the fortunes of
equity markets as they looked for positive signs from the wider
economy. Global stock markets were broadly up on Wednesday, but
oil fundamentals gave pause for thought. []
"It's pretty clear that the fundamental picture remains
bearish, but it remains to be seen when crude prices will react
accordingly, since they have continued to react to (a rise in
the) S&P stocks and the weakening dollar," Addison Armstrong,
director of market research at Tradition Energy said.
U.S. oil data from the Energy Information Administration
showed crude stocks in the world's largest energy consumer rose
by 2.5 million barrels last week, against expectations for just
a 700,000 barrel build. []
Gasoline demand in the U.S. was also steady with last year,
when prices were almost twice as high at the pumps, illustrating
the impact the recession has had on consumption despite lower
prices. More than one in 10 barrels of crude oil end up in the
U.S. gasoline pool.
The International Energy Agency (IEA) said global oil demand
growth will be lower in 2010 than previously forecast, with
little evidence a recovery is underway yet. []
The Paris-based agency, adviser to 28 industrialised
nations, said global oil demand was now seen recovering by just
1.3 million barrels per day (bpd) in 2010, having fallen by 2.3
million bpd this year as the economic crisis curbed consumption.
World oil demand hit a peak of 86.5 million bpd in 2007.
"Evidence of a bottoming out of the recession is still a bit
patchy. The latest data on industrial production for some of the
larger countries remains negative," David Martin, analyst at the
IEA, told Reuters.
"There is not clear evidence yet we have seen the worst."
FEDERAL RESERVE
Traders will also keep a close eye on the two-day U.S.
Federal Reserve meeting that ends later on Wednesday with a
statement expected at about 1815 GMT. []
"The Fed and their statement will be the biggest factor that
will drive the future of oil prices," said Phil Flynn, energy
analyst at PFGBest Research.
The statement from the Federal Reserve could influence the
direction of the dollar, which tends to have an impact on
commodities like oil which are priced in the greenback. []
The dollar was lower ahead of the meeting, making oil
cheaper for holders of other currencies.
(Additional reporting by the New York Energy Desk and Maryelle
Demongeot in Singapore; Editing by Anthony Barker)
