* Oil higher after fall in U.S. crude oil inventories
* Israel-Iran tension continues to support
* Traders await ECB meeting
(Updates throughout)
LONDON, July 2 (Reuters) - Oil rose above $142 a barrel on
Wednesday, after U.S. data showed a bigger-than-expected fall in
crude oil stocks last week in the world's largest energy
consumer.
U.S. crude <CLc1> was up $1.63 at $142.60 a barrel by 1514
GMT, while London Brent <LCOc1> was up $2.24 at $142.91 a
barrel. U.S. crude hit a record high of $143.67 on Monday.
The U.S. Energy Information Administration report showed a 2
million barrel drop in crude oil inventories last week, more
than the 100,000 barrel fall analysts had predicted.
Gasoline stocks rose by 2.1 million barrels, when these had
been forecast to fall 200,000 barrels. []
Distillates rose by 1.3 million barrels, slightly lower than
forecasts for a 1.9 million barrel increase.
"The 2 million barrel draw in crude stocks was supportive,
as imports remain relatively low for this time of year," said
Tim Evans, energy analyst, Citi Futures Perspective.
Tension between Iran, a major oil exporter, and Israel has
helped to lift prices this week, and analysts said that could
remain supportive ahead of the U.S. Independence Day holiday in
the United States on July 4.
"There could be short-covering as Iranian-Israeli tension
means few will want to go short into the long weekend," said
Mike Wittner, analyst at Societe Generale.
Adding to concern about supply, the International Energy
Agency on Tuesday cut its global oil supply forecast for the
next five years, signalling little relief from high oil prices.
The weak dollar also supported crude. The euro extended
earlier gains against the dollar to hit a two-month high on
Wednesday as traders anticipated the European Central Bank would
raise interest rates on Thursday.
Investors have been using oil and other commodities as a
hedge against the weaker dollar and inflation, helping to fuel
the market's rally of more than 40 percent since the start of
the year.
NERVOUSNESS OVER IRAN
Concern tension between Israel and Iran could disrupt
supplies from the Gulf region was partly responsible for oil's
climb to a record on Monday.
Iran's oil minister said Tehran would remain a reliable
source of supply, but would respond if threatened.
"Iran has been always a reliable source of supply to the
market, and remains as a supplier forever," Gholamhossein Nozari
said on Wednesday at an energy conference in Madrid.
"If there would be any kind of activity of any sort, Iran is
not going to be quiet and is going to react, and nobody could
imagine what would be the reaction of Iran."
Iran's Revolutionary Guards had said they would impose
controls on shipping in the Strait of Hormuz if the country were
attacked.
But the U.S. Navy's Fifth Fleet said on Wednesday the United
States would not allow Iran to block the Gulf. About 40 percent
of seaborne oil trade passes through the strait, according to
the U.S. government.
(Reporting by Chua Baizhen, Barbara Lewis and Jane Merriman)
