* EIA data showing crude drawdown counters rise in products
* Jobless claims data due later may underscore weakness
* Dollar, equity markets could provide support
By Jennifer Tan
SINGAPORE, July 23 (Reuters) - Oil was steady above $65 a
barrel on Thursday, buoyed by data showing a drop in U.S. crude
stocks, which countered the rise in gasoline and distillates
inventory, signalling weak demand from the world's top oil
user.
But U.S. weekly jobless claims figures due later are
forecast to increase from a week ago and could underscore
further weakness in the world's largest economy.
U.S. crude oil for September delivery <CLc1> rose 19 cents
to $65.59 a barrel by 0353 GMT, after earlier hitting a low of
$65.04 and settling at $65.40 on Wednesday. London Brent crude
<LCOc1> edged up 19 cents to $67.40.
"The EIA numbers, while contradicting those of the API's,
were largely in line with what traders were expecting, thus the
return of some strength in the market, but it lacks a sustained
move higher," said Jonathan Kornafel, director of Hudson
Capital Energy Asia.
Data from the Energy Information Administration (EIA)
showed U.S. crude stocks fell by 1.8 million barrels in the
week to July 17, below analysts' expectations for a 2.1
million-barrel draw, but contradicted a Tuesday report by the
American Petroleum Institute (API) which showed a 3.1
million-barrel build. []
U.S. gasoline stockpiles rose by 800,000 barrels, matching
analysts' forecasts, and inventories of distillates, including
heating oil and diesel, rose to a 25-year high.
The build came as demand for the fuels, which are linked to
industrial activity, fell by 11 percent over the past four
weeks against year-ago levels.
SOFT DEMAND PERSISTS
Likewise, Japan's crude oil import volume in June tumbled
19.1 percent from a year earlier to an 18-year low, government
data showed on Thursday, as scheduled maintenance and weak
demand reduced domestic refiners' need to ship in crude
feedstocks. []
"We expect a near-term trading range of $63-$67. The
underlying weakness in fundamentals will keep a lid on prices,
although funds will look to buy on dips," Kornafel added.
"Traders expecting equity markets to pull crude higher may
have to wait until the holiday season is over in September, as
both markets have experienced rallies and appear to have
entered a holding pattern."
Nonetheless, firm equity markets and a weaker U.S. dollar
are expected to offer some price support.
The Nasdaq rose on Wednesday for the 11th straight day,
buoyed by solid profits from Apple Inc <AAPL.O> and Starbucks
Corp <SBUX.O>, while disappointing bank results and declining
energy shares weighed on the broader market. []
In Asia, Japan's Nikkei share average <> edged up 0.13
percent on Thursday, adding to its two-week closing high as
high-tech firms gained after U.S. technology stocks rose. []
The dollar hit a seven-week low versus a basket of
currencies on Wednesday, as steady stock markets and data
showing stronger U.S. home prices offset weak bank earnings,
denting the greenback's safe-haven allure, but easing the
pressure on commodities denominated in the U.S. currency.
[]
The Labor Department will release first-time claims for
jobless benefits for the week ended July 18 at 1230 GMT.
Economists in a Reuters survey forecast a total of 550,000 new
filings, compared with 522,000 in the prior week.
(Editing by Ramthan Hussain)
