* U.S. crude breaks 200-day moving average on draw
* Brent crude tops $80, first time since August
* U.S. heating oil at 8-week high on distillates draw
* Coming up: U.S. jobless claims, Thursday, 8:30 a.m. EDT
(Recasts, updates with settlement prices, market activity)
By Gene Ramos
NEW YORK, Sept 29 (Reuters) - Oil hit a seven-week high on
Wednesday, pocketing gains of more than 2 percent after
government data showed a drop in U.S. crude and product
inventories.
A tightening in product stockpiles -- just as U.S. refiners
were stepping up seasonal maintenance and with more than a
month to go before the hurricane season winds down -- prompted
traders to bid up prices.
U.S. crude <CLc1> gained $1.68 to settle at $77.86, the
highest close since Aug. 11, after hitting a high of $78.13.
The day's percentage gain was the biggest in 19 days.
U.S. trading volume spiked to more than 700,000 lots, just
below the 30-day average. Activity picked up just before midday
as U.S. crude neared the 200-day moving average around $77.50 a
barrel before breaking above it. []
London Brent ended up $2.06 at $80.77, the highest close
since Aug. 9, after breaking above $80 for the first time since
August. []
U.S. distillate inventories dropped by 1.27 million barrels
in the week to Sept. 24, according to data from the U.S. Energy
Information Administration, counter to analyst expectations for
a 300,000 barrel build. []
Market-leading U.S. heating oil for October delivery <HOVO>
settled at $2.1905 a gallon, up 6.6 cents, or 3.12 percent, and
the highest close in eight weeks.
Gasoline stockpiles in the world's top consumer fell by 3.5
million barrels and crude inventories dropped by 475,000
barrels, as stockpiles along the U.S. East Coast fell to the
lowest level since 1990. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on U.S. crude's surge in volume early Wednesday:
http://link.reuters.com/caw95p
Graphic on key commodities' performance so far this year:
http://link.reuters.com/hun72k
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"Energy is playing catch-up in relation to the rest of the
commodities complex, in my view. Gold and agriculture have
outpaced. The reaction to the dollar and looming quantitative
easing had to eventually find its way to the energy complex,"
said John Kilduff, partner at Again Capital LLC in New York.
Crude found support earlier after 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 the No. 2 oil consumer's
economy. []
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 favor.
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. []
(Reporting by Matthew Robinson, Janet McGurty, Robert Gibbons,
Robert Campbell and David Sheppard in New York; Christopher
Johnson and Joe Brock in London; editing by Jim Marshall)
