* U.S. oil stocks fall; excess down to lowest in 11 months
* Oil set for biggest annual gains since 1999
* Demand set to continue gradual recovery next year
(Updates throughout, previous SINGAPORE)
By Joe Brock
LONDON, Dec 31 (Reuters) - Oil rose towards $80 on Thursday,
gaining for a seventh straight session and poised for the
biggest annual climb in a decade, supported by a drop in U.S.
crude and fuel stocks as icy weather stoked demand.
Crude oil stockpiles fell last week, according to U.S.
Energy Information Administration (EIA) data, while gasoline
inventories showed a surprise decline, boosting expectations of
demand recovery in the world's largest energy user. []
U.S. crude for February delivery <CLc1> rose 62 cents to
$79.90 a barrel by 0948 GMT. Prices have risen 14 percent in
just over two weeks.
London Brent crude <LCOc1> rose 78 cents to $78.81.
"...a combination of cold weather in the U.S., thin trading
conditions, and relatively constructive EIA data all helped
contribute to the (oil's) advance," Edward Meir, oil analyst at
MF Global said in a daily energy report.
U.S. oil futures were on track for the sharpest annual
percentage gain since 1999 but remain almost half the all-time
high of $147.27 hit in July 2008.
After sliding to a five-year low under $33 at the end of
2008, oil prices staged a steady climb to a high of $82 in
October this year, making the annual average $62.
Oil's near 80 percent rise this year was part of a
broad-based rally across commodities and equities as investment
returned to markets drained by the global economic recession.
Analysts said oil prices would consolidate this year's gains
in 2010 as demand continues its gradual recovery.
"TRANSITION" IN 2010
"We expect 2010 to be a year of transition between the
demand concerns of 2009 and the supply concerns of 2011, with in
addition geopolitical developments having a heightened
importance," Barclays Capital said in a research note.
U.S. crude stockpiles fell by 1.5 million barrels in the
week to Dec. 25, just off an expected 2 million-barrel decline,
data from the EIA showed on Wednesday. []
Crude inventories have slid by 19.5 million barrels in the
past four weeks, eroding the excess supply to 50.1 million
barrels, although stocks were still far above normal levels.
Most of that draw came in the isolated West Coast market,
with Gulf Coast and East Coast inventories showing builds, but
prices were also lifted by a 2 million-barrel drop in
distillates as cold weather hit the U.S. Northeast, the world's
largest heating oil market. []
Temperatures were expected to remain unseasonably cold for
the next two days, forecaster Meteorlogix said. []
An improvement in U.S. consumer confidence, underscored
optimism in the country's economic recovery, supporting Asian
equities, which are set for a near 70 percent rise on the year.
[]
Commodity markets are on course for their strongest year
since 1973, lifted by oil's biggest annual gains in a decade and
a 140 percent surge in copper prices. []
For a graphic showing how the 19 commodities that make up
the CRB index have performed, double-click:
http://graphics.thomsonreuters.com/129/CMD_RCRB1209.gif
(Additional reporting by Ramthan Hussain in Singapore; Editing
by Anthony Barker)
