Oil hovers near $72 in thin trade, market seeks fresh cues

                                
 * Oil steadies at $72, traders seek direction
                                
 * U.S. dollar broadly steady after rebound last week
                                
 By Fayen Wong
                                
 PERTH, Sept 21 (Reuters) - Oil prices were little changed
amid thin trading and hovered around $72 a barrel on Monday, as
traders sought fresh cues on the pace of recovery in the global
economy as well as movements in the U.S. dollar.
                                
 U.S. crude for October delivery <CLc1> dipped 11 cents to
$71.93 a barrel by 0200 GMT. The contract fell 43 cents to
settle at $72.04 a barrel on Friday.
                                
 London Brent crude <LCOc1> fell 12 cents to $71.20 a
barrel.
                                
 "With Japan markets on holiday in the early part of the
week, oil markets will likely seek direction from the U.S.
equities markets as well as the U.S. dollar," said David Moore,
a commodities analyst at the Commonwealth Bank of Australia.
                                
 The dollar was broadly steady in thin conditions on Monday,
having staged a rebound late last week as traders covered short
positions ahead of a crucial Federal Reserve policy meet and a
Group of 20 summit. [USD/]
                                
 Asian stocks made a quiet start on Monday, with global
markets finishing the previous week on a steady note and
activity likely to be dimmed by market holidays across the
region.
                                
 The main U.S. share indexes gained as much as 0.4 percent
on Friday, with the Dow <.DJI> hitting an 11-month high, as
broker upgrades of home builder and drug-maker stocks fuelled
optimism the economic recovery would lift corporate profits.
                                
 Some analysts said U.S. stocks could extend their rally and
the Dow industrials <.DJI> may climb above 10,000 this week,
should the Fed's policy-makers and economic data support the
view the economy is recovering from recession. [nN20274652]
                                
 Oil rose 3.9 percent last week, thanks to U.S. government
data showing a larger-than-expected draw in crude stocks, heavy
losses in the U.S. dollar and rallying stock markets on the
back of growing ebullience that the world economy is en route
to recovery after being wrecked by the worst financial crisis
since the Great Depression.
                                
 Although crude prices have only gained about 3 percent so
far this quarter, after shooting up 40 percent in the June
quarter, some analysts said oil prices were set to move higher
in coming weeks amid an economic recovery and seasonal winter
demand.
                                
 FACTS Energy Group said in a report on Friday it expects
Asia's oil demand to revert to positive growth of around
340,000 barrels per day (bpd) on the year, after five quarters
of negative growth, and China and India will be the key
drivers.
                                
 "Asian petroleum demand is expected to grow at around
885,000 bod in 2010, on the back of a recovery in the regional
economy compared to a weak 2009 baseline. As a result, this
growth will exceed our baseline regional growth expectation of
some 600,000-800,000 bpd during 'normal' times," FACTS' Lim Jit
Yang said in the report.
                                
 Separately, money managers boosted net long positions in
the NYMEX crude oil market last week in a bet prices would
rise, the Commodity Futures Trading Commission said in a report
on Friday. [ID:nN18575111]
                                
 Open interest positions were for November crude oil call
options bulked at $80, $85 and $90, while put options hovered
at the $65, $60 and $55 levels, according to Reuters data on
Friday. [ID:nN18610826]
 (Reporting by Fayen Wong; Editing by Clarence Fernandez)