* U.S. crude inventories likely up, distillates down -poll
* Wave cycle shows oil retracing to below $80
[]
* Coming Up: U.S. API weekly oil stocks; 2030 GMT
(Recasts with price rebound)
By Alejandro Barbajosa
SINGAPORE, Oct 5 (Reuters) - Oil rose on Tuesday after
Japan unexpectedly lowered interes rates, raising expectations
that stimulus for the world's third-largest oil-consuming
nation is a prelude to further boosts for other major
economies.
Japan's Nikkei average bounced back to post its biggest
daily percentage gain since mid-September, leading Asian
equities higher, while the dollar erased early gains against a
basket of currencies. <.T> <.DXY>
U.S. crude for November <CLc1> rose 11 cents to $81.58 a
barrel at 0707 GMT, less than $1 below Monday's peak at $82.38,
the highest price since Aug. 6. ICE Brent for November <LCOc1>
gained 12 cents to $83.40.
"A weaker dollar is positive for the oil markets," said
Serene Lim, a Singapore-based oil analyst at ANZ. "Unexpected
movements by central banks would have an impact on oil because
it is seen as a financial asset."
Central banks in Japan, the United States and Britain have
been under political pressure to do more to support economies
showing only tepid recovery from the worst recession in
decades.
Oil had slipped earlier on Tuesday on forecasts for gains
in U.S. crude and gasoline inventories and technical analysis
signalling Monday's rally to a two-month high was overdone.
The market "could be more cautious ahead," Lim said. "For
the release of API numbers today, the market is expecting
(crude) inventories to rise because of a rebound in imports and
refinery demand slowing down because of the maintenance season
in the U.S."
U.S. crude oil inventories probably rose last week by
600,000 barrels, while gasoline stocks were expected to have
gained 100,000 barrels as refinery utilisation dropped, a
Reuters poll ahead of weekly inventory reports showed on
Monday. []
Industry group the American Petroleum Institute (API) will
issue its weekly inventory report on Tuesday at 2030 GMT. The
U.S. Energy Information Administration (EIA) will follow with
government data on Wednesday.
DISTILLATES SUPPORT
But supplies of distillates including heating oil and
diesel were projected to have declined by 800,000 barrels as
demand remained strong, particularly for diesel, a major
component of this inventory segment, according to the poll.
"As we go into the heating oil season, there could be
potential to drive the market even higher," Lim said.
"Any surprise of better-than-expected U.S. economic data
coming out, including today's ISM non-manufacturing PMI and
Friday's non-farm payrolls will move the market even higher."
Friday sees the release of key monthly U.S. employment
data. []
U.S. economic indicators have so far this week been mixed.
Pending sales of previously owned U.S. homes rose more than
expected in August to a four-month high, but new U.S. factory
orders fell slightly more than expected. []
A crippling strike at France's top oil port, the world's
third-largest, will continue on Tuesday and some refineries are
expected to run out of crude supplies in about a week, unions
and industry officials said. []
The upper Houston Ship Channel should reopen by Tuesday
night, restoring crude flows to four refiners in Texas holding
4.9 percent of U.S. capacity before their supplies run low, the
U.S. Coast Guard said on Monday. []
The euro on Monday fell from its highest level versus the
dollar in more than six months amid renewed concerns about the
financial viability of euro zone banks, prompting investors to
cut overly bullish bets on the euro. The greenback on Tuesday
was unchanged against a basket of currencies. [] <.DXY>
Iraq raised its proven oil reserves figure by a quarter on
Monday in a bid to match the clout of leading producer Saudi
Arabia and strengthen its case for OPEC to grant it a higher
output quota. []
(Editing by Ed Lane)
