* Equities erase early losses in late bargain hunting
* Heating oil bounces after falling five straight days
* Traders ignore EIA's crude, product inventory builds
* Coming up: U.S. initial jobless claims, Thursday
By Gene Ramos
NEW YORK, Aug 25 (Reuters) - U.S. crude oil futures ended
more than 1 percent higher on Wednesday, rebounding from an
11-week low and five days of losses as the market shrugged off
government data showing across-the-board rises in crude oil and
product inventories last week.
Oil traders said oil futures got a lift from Wall Street,
where all major indexes rose in late bargain hunting after
being hobbled by weak housing data earlier.
Also supportive for crude futures were heating oil futures,
which also recovered from a five-day losing streak to end
nearly 2 percent higher.
Oil prices regained their footing despite persistent
worries that the economic recovery was stalling and with it
keep oil demand sluggish.
U.S. crude <CLc1> for October delivery settled up 89 cents
at $72.52 a barrel, after falling as low as $70.76, the lowest
price since early June. October ICE Brent <LCOc1> ended up
$1.10, or 1.5 percent, at $73.48 a barrel, gaining strength
after five consecutive days of losses.
Crude futures' 14-day relative strength index (RSI) fell to
just above 30 on Tuesday, a technical indication it was nearing
an oversold condition, and then bounced on Wednesday to above
35, according to Reuters data, as taking profits on short
positions after the five-day losing spell became attractive.
Disappointing economic data earlier weakened equities, but
they edged higher late in the day as a drop through a key
technical level in the Standard & Poor's 500 index attracted
buying. []
"Despite weak economic data and the bearish builds in the
EIA inventory report, crude oil futures have not fallen ...
as they are attached to what's going on in the stock market,"
said Richard Ilcyzysyn, senior market strategist at Lind
Waldock in Chicago.
Ilczyszyn and other analysts also noted that crude futures
had become oversold in the most recent selling binge.
"Markets are extremely oversold after being down for so
many days in a row (and) selling momentum dried up," said Tom
Bentz, broker at BNP Paribas Commodity Futures Inc in New York.
Heating oil futures rose back from a five-day losing
streak, even though total distillate stockpiles were up sharply
last week.
"Heating oil has been the leader as there has been that
seasonal shift away from gasoline and toward heating oil. At
least psychologically anyway," Bentz said.
In New York, September delivery heating <HOU0> ended up
3.49 cents, or 1.8 percent, at $1.9706 a gallon, recovering
from a near seven-week low on Tuesday.
The U.S. Energy Information Administration showed crude
inventories rose 4.11 million barrels in the week to Aug. 20,
dwarfing a forecast for a build of 200,000 barrels. []
However, crude oil inventories at the key Cushing,
Oklahoma, delivery hub fell 779,000 barrels to 36.3 million
barrels, about the only bullish feature in the weekly report.
Gasoline inventories were 2.27 million barrels higher, at
odds with forecasts of a small drawdown. Distillate stocks
increased by a higher than expected 1.76 million barrels.
In aggregate, commercial crude and product stocks rose to
1.139 billion barrels last week, topping the record weekly high
of 1.13 billion barrels set in the week to Aug. 13.
Oil futures got hammered early as data showed sales of new
U.S. single-family homes slumped to the slowest pace on record
in July. That came on top of a private sector report on Tuesday
that sales of previously owned homes in the same month plunged
to their slowest pace in 15 years. []
A separate government report showed that orders for
long-lasting U.S. manufactured goods, excluding transportation
equipment, posted their biggest drop in 1-1/2 years in July.
Also sending bearish signals, forecasters revised downwards
their expectations of the oil price both for this year and
next, a Reuters poll revealed on Wednesday.[]
"A sufficient amount of economic gloom has been rapidly
priced in over the past several days, so (today's gains)
represent a relief rally. Tomorrow's weekly jobless claims data
could be the despairing economic data point du jour sending
prices lower still," said John Kilduff, partner at Again
Capital LLC in New York.
(Additional reporting by Robert Gibbons in New York; David
Turner in London; Alejandro Barbajosa in Singapore; Editing by
Marguerita Choy)
