* U.S. oil demand jumps 6.9 pct led by distillates -EIA
* Cushing crude stockpiles decline from record -EIA
* Coming Up: U.S. Q1 GDP; 1230 GMT
* For a technical view, click: []
* TAKE A LOOK at the Reuters Energy Summit:
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(Updates prices)
By Alejandro Barbajosa
SINGAPORE, May 27 (Reuters) - Oil prices topped $72 on
Thursday, reaching the highest level in more than a week, as
Asian stock markets rebounded, adding to positive sentiment
from data showing a surge in U.S. demand.
The Nikkei rebounded from a six-month low after a
government official said China remains committed to a
long-standing goal of diversifying foreign exchange reserves,
dispelling concerns it would review its euro-zone holdings in
light of the single-currency area's debt woes. []
U.S. crude for July <CLc1> rose 74 cents to $72.25 at 0633
GMT, the highest intraday price since May 18, while ICE Brent
crude <LCOc1> increased 52 cents to $72.26.
"Oil will largely follow equity markets," said Ben
Westmore, a commodities analyst at National Australia Bank.
"They are probably the foremost gauge about where confidence is
at the moment."
For a graph on the correlation between crude and equities:
http://graphics.thomsonreuters.com/gfx/CT_20102705132137.jpg
Oil demand in the U.S. climbed almost 7 percent over the
past four weeks, the Energy Information Administration (EIA)
said on Wednesday, led by a 16 percent jump in demand for
distillates, a category that includes diesel and heating oil.
"We saw a very positive reaction in the markets in terms of
the data flow," Westmore said.
U.S. crude prices on Wednesday posted their biggest gain in
nearly eight months, adding 4 percent, after the EIA said U.S.
oil-product supplies fell last week. []
RIGHT DIRECTION
"The distillate stocks, when you account for seasonality,
are still very high -- we put them 30 percent above normal --
but a fall in gasoline and distillates is a good sign. We are
at least moving in the right direction," Westmore said.
Oil prices had earlier declined after a Wednesday report
signaling China may shed European assets fed investor concerns
that the European debt crisis could reverse the global economic
recovery.
"If you see falls and increased risk aversion and a move to
the dollar, it's going to have downward influence on oil as
well," Westmore said.
Diesel consumption is an important gauge of economic
activity because it is used for trucking and industry.
Distillate use in the U.S. had until recently lagged gasoline
consumption, following the deepest recession of the post-war
era.
"U.S. oil demand is currently surging to a degree that has
not been seen for many years," Barclays Capital analyst Paul
Horsnell said in a weekly report.
"The demand surprise has been of a very significant scale,
and the most important element of that has been the whiplash
upwards in diesel demand."
Investors were expected to look out for continued evidence
of a rebound in U.S. economic activity after reports on
Wednesday showed a surge in durable goods orders and new home
sales for April.
U.S. preliminary first-quarter Gross Domestic Product
figures will be published at 1230 GMT.
The data will show "whether the recovery is unfolding as
expected," Westmore said.
Crude stockpiles at the Cushing, Oklahoma, pricing point
fell by 300,000 barrels from record levels last week, the EIA
report showed. But the nation's total crude inventories gained
a larger-than-anticipated 2.4 million barrels.
U.S. crude is still down almost 18 percent from an
early-May 19-month high above $87.
(Editing by Ed Lane)
