* Dollar slips against basket of currencies <.DXY>
* U.S. industry data show falls in crude, winter fuel stocks
* Technicals show price rise to $78.80 []
* Coming Up: U.S. EIA weekly oil inventories; 1430 GMT
(Updates prices)
By Christopher Johnson
LONDON, Sept 29 (Reuters) - Oil rose on Wednesday, supported
by a weak dollar, strong Chinese manufacturing data and a fall
in U.S. crude and winter fuel stocks, easing a surplus that has
weighed on the market for months.
The dollar slipped against a basket of major currencies
<.DXY> after poor U.S. economic data on Tuesday reinforced
expectations the U.S. Federal Reserve would take more action to
help the struggling economy. []
Commodities and energy prices tend to move inversely to the
dollar because they are priced in the U.S. currency on
international markets.
The weaker dollar also supported gold <XAU=>, which hit a
lifetime high on Wednesday, its 10th record in 12 sessions.
U.S. crude for November <CLc1> rose 30 cents to $76.48 a
barrel by 1252 GMT, approaching a two-week high above $77
touched earlier this week. ICE Brent for November <LCOc1> was up
29 cents to $79.00.
"It is a dollar story today," said Eugen Weinberg, head of
commodity research at Commerzbank in Frankfurt. "The dollar is
very, very weak and is helping drive short-term sentiment."
"U.S. oil data is also supportive, and so are the Chinese
manufacturing figures," he added.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For graphic of the relative price performance of key
commodities so far this year:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
HSBC's China Purchasing Managers' Index hit a five-month
high in September, pointing to renewed, though moderate,
momentum in the vast industrial sector that is the backbone of
China's economy. []
U.S. DATA
China is the world's second-largest user of oil and its
consumption has been supporting energy prices this year despite
only sluggish growth in the United States and Europe.
U.S. inventories of distillates, which include heating oil
and diesel, dropped 2.8 million barrels in the week to Sept. 24,
pulling stocks 3.5 million barrels below year-ago levels, the
American Petroleum Institute said on Tuesday. []
Crude stocks fell by 2.4 million barrels, much more than the
300,000-barrel decline forecast in a Reuters survey of analysts,
but they are still 22 million barrels above year-ago levels.
Inventory data from the U.S. government's Energy Information
Administration were due out at 1430 GMT on Wednesday.
Oil prices have remained relatively stable so far this year,
trading two-thirds of 2010 between $70 and $80 per barrel, a
range that oil producers in the Organization of the Petroleum
Exporting Countries have said they favour.
OPEC meets in Vienna next month and is expected to keep its
oil production targets unchanged.
OPEC crude oil supply has fallen so far this month to the
lowest level since November 2009 due to reduced output from
Angola and smaller declines in the United Arab Emirates and
Iran, a Reuters survey showed on Tuesday. []
Iran's OPEC governor expects oil prices to reach $80 per
barrel by the start of winter, assuming there are no major
changes in the market, news agency ILNA reported on Wednesday.
"By the beginning of the cold season an increase in the oil
price to around $80 is possible," Mohammad Ali Khatibi was
quoted as saying. []
The chief economist of the International Energy Agency said
on Wednesday oil prices could exceed $80 if global growth was
over 3-3.5 percent, although sharp rises were not expected this
year or next due to excess capacity. []
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Alison Birrane)
