* U.S. crude inventories unexpectedly fell last week -API
* Crude's target higher than $87 -technicals
[]
* Coming Up: U.S. EIA petroleum inventories; 1430 GMT
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Nov 3 (Reuters) - Oil climbed to a six-month
high above $84 for a second straight session after an industry
report showed declines in U.S. inventories across fuel
categories, a sign chronic oversupply may subside in the
world's top user.
U.S. crude for December <CLc1> rose 31 cents to $84.21 by
0646 GMT, after touching $84.50 earlier on Wednesday, the
highest intraday price since May 4. ICE Brent <LCOc1> rose 27
cents to $85.68.
Expectations the Federal Reserve will announce on Wednesday
a fresh round of expansionary monetary policy kept the dollar
under pressure, helping commodity prices, while Republican
gains in the U.S. Congress lifted sentiment in Wall Street.
U.S. crude inventories fell by 4.1 million barrels in the
week to Oct. 29, the American Petroleum Institute (API)
reported on Tuesday, before the Energy Information
Administration (EIA) releases official statistics later on
Wednesday. That compared with expectations for a 1.2 million
barrel increase. []
"Overall, it's a bullish set of data, and sets a bullish
outlook for the EIA," said Serene Lim, a Singapore-based oil
analyst at ANZ. "It could be the beginning of the seasonal
downward trend as we enter the winter season in the Northern
Hemisphere."
Distillates stockpiles, including heating oil and diesel,
fell 4.7 million barrels, more than four times the expected 1.1
million barrel draw in a Reuters survey, while gasoline
supplies fell by 3.2 million barrels, against forecasts of
little change.
Strikes at French refineries limited European exports of
gasoline to the United States, while west-to-east transatlantic
flows of distillates probably increased as shortages loomed
because of the walkouts, analysts said.
OPEC LIFTS PRICE RANGE
Oil prices at $100 a barrel would be more comfortable for
producing nations because of higher food prices and a weaker
dollar, the top oil official for OPEC member Libya said on
Tuesday. []
The Libyan comments came a day after Saudi Arabian Oil
Minister Ali al-Naimi said oil in a $70-$90 range was
comfortable for consumers, signaling a higher acceptable range
from the $70-$80 range previously deemed comfortable.
[]
Qatar's oil minister also said $70-$90 per barrel would be
reasonable for consumers and producers. []
Euro-zone manufacturing picked up its pace last month, a
business survey showed Tuesday, one day after
better-than-expected U.S. and Chinese factory data increased
optimism about the global economy and revived risk appetite.
[]
"What we are looking at is economic numbers improving, but
how this translates into oil demand growth we may only see next
year," Lim said. "At the moment, the well-supplied story is
still standing and we don't see demand growth outpacing supply
growth until next year."
The U.S. dollar recovered some ground on Wednesday, before
the second day of meeting by the Federal Reserve.
Some analysts pointed to the risk that the Fed's
announcement of a new round of bond purchases, also known as
quantitative easing, or QE, would have a limited impact on
markets that already priced in the expected monetary easing.
BNP Paribas head of commodity markets strategy Harry
Tchilinguirian said: "We also remain circumspect as to how much
more price mileage oil will get from the announcement of a
second round of quantitative easing in the short term," adding
that if it was already discounted, the recent rally in oil
prices might prove to be a case of "buy the rumour, sell the
fact".
Asian stocks rose on Wednesday following overnight gains on
Wall Street as Tuesday's mid-term elections in the U.S. looked
to favour the Republican party. []
Republicans rolled up key early U.S. election wins on
Tuesday after a long and bitter campaign that could sweep
Democrats from power in Congress and slam the brakes on
President Barack Obama's agenda. []
(Editing by Manash Goswami)
