* Japan cuts rates, eases monetary policy []
* Dollar, yen fall, euro rallies []
* Wave cycle sees oil retracing below $80 []
* U.S. crude inventories likely up, distillates down -poll
* Coming Up: U.S. API weekly oil stocks; 2030 GMT
(Updates prices, detail)
By Christopher Johnson
LONDON, Oct 5 (Reuters) - Oil prices rose on Tuesday,
building on a week of gains after Japan unexpectedly lowered
interest rates, raising expectations of boosts for other major
economies.
The Bank of Japan cut its overnight rate target to a range
between zero and 0.1 percent from 0.1 percent and pledged to buy
5 trillion yen ($60 billion) worth of assets in an attempt to
stimulate the world's third-largest oil-consuming nation.
Stock markets rallied with Japan's Nikkei average bouncing
back to its biggest daily percentage gain for almost three
weeks, while the dollar slipped. <.T> <.DXY>
Oil often moves inversely to the dollar as it is priced in
the U.S. currency on international markets.
U.S. crude for November <CLc1> rose 45 cents to $81.92 a
barrel by 1140 GMT, not far below Monday's peak at $82.38, the
highest price since Aug. 6. ICE Brent for November <LCOc1>
gained 40 cents to $83.68.
"The Japanese moves are supporting prices," said Christophe
Barret, analyst at Credit Agricole. "In the past, increased
liquidity has found its way into commodity markets and
expectations of other stimulus programmes are also positive."
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.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of key commodities so far this year, click:
http://graphics.thomsonreuters.com/F/09/CMD_Q3PF.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
OIL INVENTORIES
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. []
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.
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, the poll said.
A crippling strike at France's top oil port, the world's
third-largest, continued on Tuesday and some refineries were
expected to run out of crude supplies in about a week, unions
and industry officials said. []
The upper Houston Ship Channel should reopen later on
Tuesday, 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. []
Investors were keeping a wary eye on signals from oil
producers ahead of next week's meeting of the Organization of
the Petroleum Exporting Countries, which is expected to keep oil
output targets unchanged.
"Everything but leaving output allocations unchanged would
come as a major surprise," said David Wech of JBC Energy.
"Crude prices have been trading in the targeted $70 to $80
per barrel range for more than a year, making OPEC members happy
and giving them no incentive to change allocations."
OPEC may discuss production by Iraq, which has no oil output
target as it rebuilds after years of war. Iraq raised its
estimate of proven oil reserves by a quarter on Monday.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Alison Birrane)
