* Oil in $1 range near $71 a barrel
* Analysts say demand too weak for strong rally above $70
* Market shifts focus to EIA data
(Updates prices, adds details, previous SINGAPORE)
By David Sheppard
LONDON, Sept 16 (Reuters) - Oil eased lower below $71 a
barrel on Wednesday as a higher-than-expected rise in U.S. fuel
stocks overshadowed signs of an economic recovery.
NYMEX crude for October delivery <CLc1> was down 27 cents at
$70.66 a barrel by 0902 GMT, after settling up $2.07 on Tuesday,
while ICE Brent <LCOc1> was down 44 cents at $69.42.
Oil has more than doubled from lows near $32 a barrel at the
beginning of this year, hitting a high of $75 a barrel three
weeks ago on early signs of an economic recovery.
The American Petroleum Institute said in its weekly
inventory report after Tuesday's close that crude stocks rose by
631,000 barrels last week in the world's largest energy
consumer, against market expectations for a drawdown of 2.4
million barrels. []
The industry group also said distillate stocks, which
include heating oil and diesel fuel, jumped by 5.2 million
barrels, against a forecast rise of 1.3 million. Traders focused
next on data from the U.S. Energy Information Administration
(EIA), which is due at 1430 GMT on Wednesday. []
"It is evident from the figures that demand is still
lacking. I expect prices to hover between $60 and $70," Informa
Global Markets analyst Michelle Kwek said.
"At this stage, you could say that demand has still not
recovered to the extent that would help to sustain prices above
$70."
SIGNS OF RECOVERY?
Investors drew strength from data showing strong growth in
U.S. retail sales, New York State manufacturing activity and
U.S. producers' prices, which all have the potential to boost
oil demand.
Rising risk appetite also saw equities and other
commodities, particularly gold, rise in Europe and Asia on
Wednesday and pushed the dollar to its lowest level this year
against a basket of currencies. []
The FTSEUrofirst 300 <> index of top European shares
cracked the 1,000 mark for the first time since October 2008.
[]
"The weaker dollar is the supportive element now," said Toby
Hassall, head of research at Commodity Warrants Australia.
Weakness in the dollar tends to boost dollar-priced
commodities like oil as they become cheaper for holders of other
currencies.
Federal Reserve Chairman Ben Bernanke said the worst U.S.
recession since the Great Depression had probably ended, but the
recovery would be slow and creating new jobs would take time.
[]
The Organization of the Petroleum Exporting Countries took a
similar stance saying there are increasing signs of recovery but
it was unlikely to be a rapid rebound. []
(Additional reporting by Sambit Mohanty in Singapore;
Editing by William Hardy)
