* EIA says crude inventories post surprise increase
* U.S. industrial production rises, supportive to oil
* U.S. housing starts fell in May, curbs oil rise
* Coming up: U.S. July crude options expire on Thursday
(Releads, updates with settlement)
NEW YORK, June 16 (Reuters) - U.S. crude oil rose a third
straight session on Wednesday, ending a choppy session at a
six-week high amid mixed economic data and a government
inventory report that showed crude oil stocks rose and gasoline
stocks fell last week.
"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.
On Wednesday, U.S. crude for July delivery <CLc1> rose 73
cents, or 0.95 percent, to settle at $77.67 a barrel, highest
close since settling at $79.97 on May 5.
Trading ranged from $76.06 to $78.13, highest intraday
front-month price since $78.19 was struck on May 7.
In London, ICE Brent crude <LCOc1> for August delivery rose
$1.04 to settle at $78.14 a barrel.
"The ability of the energy complex to advance significantly
today without much assistance from the euro or equities
suggests an energy momentum play at work," Jim Ritterbusch,
president at Ritterbusch & Associates, said in a note.
Ahead of the Wednesday's oil inventory data, there was a
mixed bag of U.S. economic data. U.S. industrial production
rose faster than expected in May, but U.S. housing starts fell
more than expected during that month. []
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.
Oil prices have rebounded from the 2010 low of $64.24 a
barrel struck May 20. Gains in the previous two sessions were
fueled by rallying equities and a stronger euro. The S&P 500
index moved above its 200-day moving average on Tuesday,
helping push U.S. crude prices above their own key 200-day
moving average.
Crude oil stocks at the Cushing, Oklahoma, delivery hub for
U.S. futures rose by 200,000 barrels to 37.6 million barrels,
EIA said, helping keep front-month crude prices at a deficit to
the nearby month out <CL-1=R>.
The EIA said gasoline demand over the past four weeks was
down 0.2 percent from a year ago, while distillate demand over
the same period was up 13.6 percent from a year ago, helping to
lift heating oil futures, which gained 2 percent on Wednesday.
U.S. stocks slipped on Wednesday as a warning from FedEx
<FDX.N> that higher costs would hurt 2011 profits overshadowed
a surge in industrial production. [] But European shares
closed higher. [] []
The euro slipped against the dollar on fresh concerns about
Spain's credit and banking system, but only after it hit a
two-week high in early trading. []
Iran's dispute over its nuclear program also was cited as
supporting oil prices. The U.S. Treasury announced new
sanctions on Iran to curb its nuclear program. []
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 Marguerita Choy)
