* Technicals: Brent, WTI outlooks diverge []
* Coming Up: U.S. EIA oil inventories, demand; 1500 GMT
(Updates throughout, previous SINGAPORE)
By Marie-Louise Gumuchian
LONDON, Sept 9 (Reuters) - Oil rose towards $75 a barrel on
Thursday, drawing some strength from an initial report of
falling U.S. inventories.
Industry data late on Wednesday surprised the market with
news of a decline in U.S. fuel stockpiles, which have hit record
levels, but government statistics for release on Thursday could
contradict that.
U.S. crude for October <CLc1> added 25 cents to $74.92 a
barrel at 0832 GMT, approaching this week's high of $75.39
reached on Wednesday. Brent crude <LCOc1> fell 10 cents to
$78.07.
"There are tentative signs of improving demand from what we
saw last week," said Stefan Graber, a commodities analyst with
Credit Suisse in Singapore. "That could suggest demand
conditions are firming indeed."
Analysts have forecast U.S. crude stockpiles rose for the
third consecutive time last week as refinery utilization fell,
an expanded Reuters poll showed on Wednesday. []
U.S. crude stocks fell 7.3 million barrels last week, the
American Petroleum Institute reported, versus analysts
expectations for a 900,000-barrel gain.
Government statistics on inventories will follow at 1500 GMT
from the U.S. Department of Energy's (DOE) Energy Information
Administration. The API and EIA reports were delayed by one day
because of the U.S. Labor Day holiday on Monday.
"If the API drop is confirmed also by the DOE numbers, this
would have a positive impact on sentiment for the rest of week,"
Graber said.
Oversupply and weak demand have been largely a function of
this stage of financial recovery and nearly all markets have
focused on similar data as they seek evidence of economic
growth.
The oil market has spent much of the year in lockstep with
equities and negatively correlated to the U.S. dollar.
The all-country world index <.MIWD00000PUS> was up 0.03
percent, while the dollar rose by 0.18 percent against a basket
of currencies <.DXY>.
A strengthening dollar can be negative for
dollar-denominated commodities, which become more expensive for
non-dollar buyers.
Chinese equity and commodity markets were jolted in Asian
trade by an investigation into trading on the Shanghai rubber
market, which traders said had encouraged dealers to lock in
profits. []
WTI DISLOCATION
U.S. fuel stockpiles hit their highest since weekly records
began in 1990 in the week to Aug. 27.
The huge volumes of inventory in Cushing, Oklahoma, the
delivery point for the main U.S. benchmark, have deeply
depressed U.S. crude futures relative to the European benchmark
Brent.
That has taken the spread between the two contracts to more
than $3, close to its widest since mid-May. <CL-LCO1=R>
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For a graphic on Brent's premium over WTI:
http://graphics.thomsonreuters.com/AS/0810/ABE_20100809105935.j
pg
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The gap between U.S. and Brent futures could narrow if U.S.
oil draws strength from any hurricane disruption to U.S. oil and
gas infrastructure.
The U.S. National Hurricane Center was monitoring
newly-formed Tropical Storm Igor in the far eastern Atlantic
Ocean and three other weather systems in the basin.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by Barbara Lewis and Alison Birrane)
