* U.S. crude stocks fell more than expected last week-API
* Coming Up: EIA inventory report 1500 GMT
* For a technical view, click: []
(Recasts, adds detail, changes dateline from SINGAPORE)
By David Sheppard
LONDON, June 3 (Reuters) - Oil prices rose by almost 2
percent on Thursday due to an industry report that showed a drop
in U.S. crude inventories and as robust economic indicators
injected confidence into financial markets.
U.S. crude prices for July <CLc1> rose $1.15 to $74.01 a
barrel at 0852 GMT, taking gains for the week to almost $4 a
barrel. ICE Brent <LCOc1> rose 99 cents to $74.74 a barrel by
the same time.
The American Petroleum Institute (API) reported late on
Wednesday U.S. crude stockpiles fell by more-than-expected last
week, dropping by 1.4 million barrels versus market expectations
of just a 100,000 barrel fall.
Oil traders awaited confirmation of the decline from
government statistics due later on Thursday. []
Optimism from surprisingly strong U.S. housing data and
double-digit auto sales growth also extended into Thursday,
boosting equities in Asia and Europe and pressuring the U.S.
dollar.
"We've seen oil prices taking their cues to a large degree
from equity market movements," said Toby Hassall, chief
commodities analyst at CWA Global Markets Pty Ltd.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a correlation graphic of oil, equities and the euro:
http://graphics.thomsonreuters.com/gfx/AB_20100306145731.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"If this spike in risk aversion is reversing, you might
expect the U.S. dollar to give up some recent gains. That
improvement in risk appetite might feed into oil prices, and the
typical seasonal decline in stockpiles in the U.S. would also be
supportive."
In addition to the crude stocks decline, the API said
gasoline stocks in the United States fell by 962,000 barrels
last week, compared with forecasts for a 500,000 barrel decline.
Stocks of distillates, which include diesel and heating oil,
rose by 852,000 barrels, above expectations for a 100,000 rise.
VOLATILE WEEK
Concern about a slowdown in China's economy weighed on oil
prices earlier this week, hitting sentiment already battered by
Europe's debt crisis.
But U.S. pending home sales in April rose more than expected
to a six-month high, the third consecutive month of gains,
fuelling optimism that an economic recovery is gaining steam in
the world's top economy. []
Oil prices have traded in a range between $71.64 and $75.33
this week, torn between evidence that the world's biggest
oil-consuming nations are posting steady demand growth and
speculation that consumption will be hurt by a stagnant European
economy.
"Crude demand will ease slightly ahead of the seasonal
pick-up in the second half of this year, but we remain confident
it will still grow strongly in 2010," VTB Capital analyst Andrey
Kryuchenkov said.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Sue Thomas)
