* U.S. gasoline and distillate stocks fall, crude rises
* OPEC decides to leave output targets unchanged
* OPEC pumping above quotas to meet rising demand - Saudi
* Russia's Rosneft faces export deadlock
* Coming up: Oil inventory for Cushing, OK, from Genscape
(Recasts, updates prices at settlement, adds quote)
By David Sheppard and Ed McAllister
NEW YORK, March 17 (Reuters) - Oil rose more than 1 percent
to end near $83 a barrel on Wednesday after a U.S. government
report showed increased oil product demand and as OPEC decided
to leave output targets unchanged.
A weaker U.S. dollar against a basket of currencies also
provided support, following Tuesday's U.S. Federal Reserve
decision to keep low interest rates steady.
U.S. crude for April delivery <CLc1> gained $1.23 to settle
at $82.93 a barrel. London Brent crude <LCOc1> rose $1.43 to
settle at $81.96.
Data from the U.S. Energy Information Administration (EIA)
on Wednesday showed oil product demand in the world's largest
energy consumer was up 3.5 percent last week from a year ago.
A 1.7 million-barrel drop in gasoline stocks and a 1.4
million-barrel drop in heating oil stocks was partly offset by
a 1.1 million-barrel rise in crude oil inventories. []
"Today's EIA data reaffirms improving demand and
fundamentals for the energy complex, led by gasoline," said
Chris Jarvis, senior analyst at Caprock Risk Management.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
OPEC compliance with production cutbacks
http://link.reuters.com/vah34j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Weekly crude inventory data for the Cushing, Oklahoma, oil
hub from Genscape is due out Thursday at 10:30 a.m. EDT (1430
GMT).
The dollar fell against a basket of currencies on Wednesday
as investors sought better returns elsewhere. [] The U.S.
Federal Reserves' commitment to low interest rates on Tuesday
lifted optimism and helped push up U.S. markets. []
"A renewed appetite for risk is currently spurring much of
the price strength and is tied in with strong global equity
markets and a soft U.S. dollar," said Jim Ritterbusch,
president at Ritterbusch & Associates in Galena, Illinois.
Earlier on Wednesday, Saudi Arabia's Oil Minister Ali
al-Naimi described current prices as "beautiful" as the OPEC
producer group decided to leave record output curbs unchanged
at its meeting in Vienna.
Members of the Organization of the Petroleum Exporting
Countries, which pumps roughly one in every three barrels of
oil, maintained official cuts of 4.2 million barrels per day
(bpd). []
Since curbing output in December 2008 as the economic
crisis intensified, OPEC has seen prices rally from below $40 a
barrel to a peak of $83.95 in January, despite lower compliance
from some members in recent months.
Naimi said global oil demand will grow by about 1 million
bpd by the second half of this year
"Good demand, reliable supply, beautiful prices -- we are
very happy," Naimi said. []
"Everything is relative -- if there was no demand, there
would be no leakage," Naimi said.
A nascent recovery in the global economy and higher prices
has encouraged revenue-hungry OPEC members to pump more oil. In
February, they were making just 53 percent of promised cuts.
Saudi Arabia, OPEC's largest producer, has previously said
oil near $75 a barrel is necessary to encourage investment in
future supplies to meet booming demand from emerging economies,
and is ultimately good for both producers and consumers.
But rising prices at the pumps have threatened to squeeze
consumers still struggling in the aftermath of the worst
recession for 70 years.
Retail gasoline prices in the United States soared to their
highest level in nearly 18 months last week and could soon top
$3 a gallon, the U.S. Department of Energy said on Monday.
Unemployment in the world's largest energy consumer is almost
10 percent. []
Oil prices were boosted further by news that Russian oil
major Rosneft <ROSN.MM> faces a possible export deadlock after
bankrupt rival YUKOS won U.S. and British court injunctions
making cash payments to the state oil company in the West very
complex, market sources said on Wednesday. []
Rosneft declined to comment on the injunctions, which trade
and industry sources said were part of a legal battle between
YUKOS and the Russian government, which dissolved YUKOS after
putting increasing pressure on the company between 2003 and
2007. Most of the assets ultimately ended up with Rosneft.
(Additional reporting by Fayen Wong in Perth and the New York
York Energy Desk; editing by Julie Ingwersen)
