* Fed to complete bond-buying program as planned
* Fed sees effects of hiked commodity prices fleeting
* U.S.gasoline stocks down for 10th week, EIA data shows
* Coming Up: Preliminary 1st quarter U.S. GDP, Thursday
(Recasts, updates prices, market activity after Fed
announcement)
By Gene Ramos
NEW YORK, April 27 (Reuters) - Crude oil prices rose in
choppy trading on Wednesday after government data showed
declining U.S. gasoline stockpiles and rose further after the
Federal Reserve said it would keep interest rates low,
Following a two-day policy meeting, the Fed said it will
complete its bond-buying program this quarter as planned,
continuing support for the still wobbly recovery.
The central bank said that while energy and commodity
prices were rising, their effects would be "transitory." That
was interpreted as helping pressure the dollar lower and thus
making oil and other commodities attractive to investors.
In London, ICE Brent crude <LCOc1> gained $1.55 to $125.69
a barrel by 1:55 p.m. EDT (1755 GMT). U.S. crude <CLc1> gained
$1.01 to $113.11. Both are moving towards their 2011 highs.
Fed Chairman Ben Bernanke will give an unprecedented news
conference at 2:15 p.m. EDT (1815 GMT), which investors will
watch for more clues about forthcoming U.S. monetary policy.
Oil investors would view continuation of the current policy
as a positive sign for oil demand going forward.
Midmorning, crude got a lift from U.S. Energy Information
Administration data showing domestic gasoline stockpiles fell
2.51 million barrels last week to the lowest level since August
2009. It was the 10th drawdown in a row, much deeper than the
1.1 million barrel draw forecast in a Reuters poll.
Tighter gasoline supplies offset the sting from data that
U.S. crude inventories shot up a whopping 6.2 million barrels
last week, dwarfing expectations in the poll for an 800,000
barrel build.
U.S. May gasoline futures extended the day's gains to hit a
session high of $3.4171 a gallon, up 5.99 cents, and marking
the highest level for a front-month gasoline contract sihnce
July, 2008.
DOLLAR WEAKNESS, MIDEAST UNREST SUPPORTIVE
The dollar remained pressured, which buoyed oil and
commodity prices. The greenback had fallen to a three-year low
against major currencies before the Fed statement.
"Since the Fed is ignoring inflationary pressures, it
suggests further downside pressure on the dollar which would
translate into higher commodity prices," said Tom Knight,
trader at Truman Arnold in Texarkana, Texas.
Violence in the Middle East was unabated with unrest aging
in Syria and Yemen. Italian oil and gas group Eni, reporting
earnings on Wednesday, said production fell almost 9 percent in
the first quarter because of the fighting in Libya.
Lending support to Brent, BP said the North Sea's Forties
pipeline may have to be shut for a few days later this year due
to the discovery of an unexploded German mine from World War
II.
HIGH PUMP PRICES FUEL ECONOMIC ANXIETY
U.S. crude prices have risen more than 20 percent so far
this year and consumers in the world's largest economy are
starting to show signs of being hurt by higher fuel costs.
U.S. President Barack Obama on Tuesday urged producers to
raise crude output as he sought to deflect public anger over
high gasoline prices. U.S. motor fuel prices have become a
heated political issue after pushing towards $4 a gallon.
Obama's appeal followed comments from top oil exporter
Saudi Arabia that it was not comfortable with high oil prices
and their effect on global growth.
OPEC has declined to make any official change in its oil
output policy, but members including Saudi Arabia have been
informally adding extra supplies.
(Additional reporting by Robert Gibbons and Janet McGurty in
New York; Alex Lawler in London and Manash Goswami in
Singapore; Editing by David Gregorio)
