UPDATE 1-Oil strikes $107; lower US stocks hopes curb losses

                                
 * Oil rises, hovers around $107 a barrel
                                
 * Market awaits details of U.S. government's rescue plan
                                
 * U.S. crude stocks forecast to fall in Reuters poll
(Updates prices, analyst's comments)
                                
 By Fayen Wong
                                
 PERTH, Sept 24 (Reuters) - Oil climbed towards $107 a
barrel on Wednesday, pausing from its 2.5 percent decline a day
earlier, as forecast of a drop in U.S. crude stocks more than
offset doubts about the U.S. government's financial rescue
plan.
                                
 A dip in the U.S. dollar also lent support to oil prices.
                                
 U.S. light crude for November delivery <CLc1> rose 39 cents
to $107 a barrel by 0545 GMT, after settling down $2.76 at
$106.61 on Tuesday. London Brent crude <LCOc1> rose 42 cents to
$103.50.
                                
 The losses on Tuesday followed a record surge of nearly 16
percent in the now-expired U.S. October crude contract on
Monday. The U.S. Commodity Futures Trading Commission said it
was reviewing the price jump to ensure trading was valid.
                                
 "While trading based on fundamentals instead of panic has
yet to return to any market, crude oil traders appear to be
digesting the latest supply issues," Jonathan Kornafel, Asia
director of Hudson Capital Energy, said.
                                
 A Reuters poll of analysts ahead of weekly U.S. government
inventory data due later on Wednesday forecast that crude
stocks fell for the fifth week by 2.0 million barrels last week
due to disruptions caused by Ike. [EIA/S]
                                
 Distillate stocks were forecast to have fallen by 1.5
million barrels, with gasoline stocks expected to have dropped
for the ninth straight week by 4 million barrels after Ike shut
Gulf Coast refineries.
                                
 A slow recovery in oil and gas production in U.S. Gulf of
Mexico, home to a quarter of U.S. output, also lent support to
prices.
                                
 Energy firms continued to work on restarting production,
refineries and pipelines after Hurricane Ike battered U.S. oil
infrastructure. But nearly 70 percent of production remains
closed in the Gulf of Mexico.
                                
 For Factbox, click on [ID:nN23476121]
                                
 Oil jumped nearly 7 percent on Friday to cap its biggest
three-day rally in a decade on expectations a $700 billion U.S.
government bailout plan would put an end to the global
financial crisis and support demand in the world's top energy
consumer.
                                
 But the initial euphoria has given way to doubts amid
concerns that political resistance could delay the rescue
package. [ID:nLN564532]
                                
 Oil has gained 11.4 percent so far this year on
geopolitical tensions between Iran and the West, supply
disruptions in Nigeria and falling U.S. dollar, but is still 27
percent below the record price over $147 it hit in mid-July.
                                
 The dollar inched down against the euro and trimmed gains
versus the yen on uncertainty about the effectiveness of the
U.S. bailout plan. [USD/]
 (Editing by Ben Tan)