* Oil falls below $77 on stronger dollar
* Fall in commodities, gold also hurts sentiment
* Oil demand to stay strong, but prices unlikely to jump
(Updates prices)
By Seng Li Peng
SINGAPORE, Feb 18 (Reuters) - Oil fell below $77 a barrel
on Thursday, dragged down by a stronger dollar and weaker gold
prices, which dampened other commodities and outweighed upbeat
news on the U.S. economy.
The dollar rose to near nine-month highs on the euro, which
was hounded by the sovereign debt woes of Greece and a weak
eurozone growth outlook, in contrast to news that Federal
Reserve policy makers, confident in the U.S. recovery, aim to
begin unwinding stimulus measures soon. []
U.S. crude for March delivery <CLc1> fell 64 cents to
$76.69 a barrel by 0807 GMT. London Brent crude for April
<LCOc1> lost 61 cents to $75.66 a barrel.
"The U.S. dollar has rebounded, as it was pretty much
oversold previously," said Peter McGuire, managing director of
Commodity Warrants Australia in Sydney.
"All the commodities went up on Tuesday evening, but a lot
of them took a nosedive."
The U.S. dollar was up by about 0.35 percent against a
basket of six major currencies <.DXY>, making oil and other
commodities more expensive for holders of other currencies.
[].
The Australian dollar was under pressure on plans by the
International Monetary Fund to sell more of its gold holdings.
Australia is the world's No.2 gold exporter.
Spot gold <XAU=> dropped about 1 percent, and by 0807 GMT
the precious metal was down 0.6 percent at $1,099.90 from New
York's notional close of $1,106.00. [].
Spot gold had hit a peak of $1,126.85 an ounce on Wednesday
ahead of the IMF statement, its highest since Jan. 20. []
"Gold was off nearly $20 from a high, and that probably
floated a little across to the crude market," said McGuire.
He added that crude prices will be within the $72-$79 a
barrel band in the short term.
But other analysts are more optimistic, saying that demand
for crude is expected to stay strong due to the recovery
underway in Asia and the United States.
"The demand profile remains robust, with growth outpacing
supply-side additions," Barclays Capital said in a report.
"With even the middle of the barrel likely to show some
relative improvement in the second quarter, the likely price
momentum remains skewed to the upside, in our view."
Barcap added that the trading range should start to move
up, with $80 per barrel transitioning from being an effective
ceiling to becoming an effective floor.
"The level of floating crude inventories not in transit
continues to fall and should become insignificant over the next
couple of months," it added.
But in the short haul, oil prices may not see any major
upward movement as distillates stocks held on tankers remained
a worry despite the recent falls, other traders said.
U.S. crude inventories edged down unexpectedly by 63,000
barrels last week -- versus forecasts for a 2.2. million-barrel
rise -- as refineries increased activity, data from industry
group American Petroleum Institute showed. [].
Gasoline inventories rose 1.4 million barrels, while
distillates -- which include heating oil and diesel -- rose 1.3
million barrels. (EIA/S]
The U.S. Energy Information Administration's oil inventory
report will be published on Thursday at 1600 GMT. (Editing by
Clarence Fernandez)
