* EIA says crude inventories post surprise increase
* U.S. industrial production rises, supportive to oil
* U.S. housing starts fell in May, weighs on oil
* Coming up: May U.S. Consumer price index on Thursday
(Recasts, updates prices; changes dateline from LONDON)
By Robert Gibbons
NEW YORK, June 16 (Reuters) - U.S. crude oil futures
bounced up on Wednesday in a choppy session as oil and equities
markets reacted to mixed economic data and a U.S. government
inventory report the showed crude oil stocks higher, but
gasoline stocks lower.
"Oil was technically strong yesterday on the move above
$76.30 and the S&P 500's move above it's 200-day moving
average," said Richard Ilczyszyn, senior market strategist at
Lind-Waldock in Chicago.
At 12:55 p.m. EDT (1655 GMT), U.S. crude for July delivery
<CLc1> was up 72 cents at $77.66 a barrel, trading from $76.06
to $77.90. In London, ICE Brent crude <LCOc1> for August
delivery was up 94 cents at $78.04 a barrel.
Ahead of the oil inventory data, there was a mixed bag of
data on the U.S. economy. U.S. industrial production rose
faster than expected in May, but U.S. housing starts fell more
than expected during that month. []
"The dollar pulled back and euro cut some of its loss and,
while the crude data was bearish, gasoline is being supported
by the inventory drop," said Ilczyszyn.
The U.S. Energy Information Administration said crude oil
inventories rose 1.7 million barrels last week. The expectation
was that stockpiles would be down 1.2 million barrels. []
A Tuesday report from the American Petroleum Institute, an
industry group, also showed a surprise rise in U.S. crude
stocks, up 579,000 barrels. []
The EIA data showed gasoline stocks fell 700,000 barrels,
against expectations for a small build, and distillate stocks
rose 1.8 million barrels, more than expected.
"The (inventory) report seems to be slightly bearish, but I
don't think it's a significant enough change in the statistics
to be a game changer here. I think that we are mirroring the
broader financial markets," said Gene McGillian, an analyst at
Tradition Energy in Stamford, Connecticut.
Oil prices have rebounded from the 2010 low of $64.24 a
barrel struck May 20 and ended at a five-week high on Tuesday,
rallying along with the euro and Wall Street on revived
confidence about global economic recovery.
Gains in the last two sessions have been fueled by rallying
equities. World stocks rose and the S&P 500 index moved above
its 200-day moving average on Tuesday, helping push U.S. crude
prices above their key technical 200-day moving average.
U.S. stocks were mixed near midday Wednesday in New York.
The Nasdaq turned higher and traded near flat, while the Dow
and S&P 500 trimmed losses. []
The euro was little changed against the dollar as a
recovery in U.S. stocks lifted risk appetite and offset fresh
concerns about Spain's credit and banking system. []
Iran's dispute over its nuclear program also was seen as
supportive to crude oil. The United States was to unveil on
Wednesday new economic steps it plans to take to try to
pressure Iran and build on the latest round of U.N. sanctions,
according to an Obama administration official said.
[]
Also supportive were concerns about drilling delays in the
U.S. Gulf of Mexico as producers shy away from deepwater
drilling following BP Plc's spill fouling the Gulf.
But some market watchers think the accident could
accelerate the shift away from traditional energy sources such
as oil in the long term.
(Additional reporting by the New York Energy Desk, Alejandro
Barbajosa in Singapore, and Emma Farge and Alex Lawler in
London; Editing by Walter Bagley)
