* U.S. weekly crude stocks fall, fuel inventories build-API
* Gold hits record high on weak dollar; supports commodities
* EIA weekly stock data, FOMC meeting decision eyed
(Updates throughout, previous SINGAPORE)
By Joe Brock
LONDON, Nov 4 (Reuters) - Oil rose above $80 a barrel on
Wednesday, extending the previous session's near 2 percent gain,
following a U.S. industry report showing an unexpected fall in
crude stocks and supported by a weaker dollar.
The U.S. dollar fell against a basket of currencies on
Wednesday <.DXY>, helping to send gold prices to record highs
and lifting oil. A weaker dollar makes commodities like oil
cheaper for those holding other currencies.
U.S. crude for December <CLc1> rose 64 cents to $80.24 a
barrel by 0951 GMT, after settling up $1.47 on Tuesday. London
Brent crude <LCOc1> added 49 cent to $78.60 a barrel.
"I think a combination of the weaker dollar and inventories
is lifting oil," said Carsten Fritsch, oil analyst at
Commerzbank in Frankfurt.
"After yesterday's data the market may be anticipating a
similar result in today's inventory numbers, which is another
reason for oil rising," Fritsch added.
Industry group American Petroleum Institute said late on
Tuesday that U.S. commercial crude oil stocks fell 3.3 million
barrels as imports dropped in the week to Oct. 30, versus
expectations for a 1.4 million-barrel rise.
The data lifted optimism that the pace of oil demand
recovery was picking up in the world's largest energy user,
helping to send oil prices higher.
The API did say however that gasoline stocks rose by 501,000
barrels last week against forecasts for a 300,000-barrel
increase, while distillate supplies increased by 1.8 million
barrels versus predictions for a 1 million-barrel decline.
[]
The API data comes ahead of the more closely watched
inventory data from the Energy Information Administration, due
to be released at 1530 GMT.
Gold stayed hit a record high above $1,090 per ounce hit the
previous day as the dollar weakened and after the International
Monetary Fund's 200-tonne sale of gold to India's central bank
enhanced sentiment toward the metal. []
The U.S. Federal Reserve ends its two-day meeting on
Wednesday and, while it is expected to keep rates unchanged,
there is speculation it might drop or alter its pledge to keep
rates low for an "extended period", even as signs of a recovery
mount. [].
The International Energy Agency (IEA) will "substantially"
downgrade its long-term oil demand forecast in its annual energy
outlook next week, the second cut in a row, the Wall Street
Journal said, citing a person familiar with the report.
While the IEA's outlook is unlikely to affect the short-term
view that the global economy's recovery from recession is
lifting oil use, it is an important measure for oil companies
considering whether to build refineries or drill new wells.
[]
(Editing by William Hardy)
