* Oil settles at highest since Oct. 14, 2008
* Dow Jones industrials hit 10,000 mark
* US inventory data could show build in crude stocks
(Updates prices at settlement)
By Edward McAllister
NEW YORK, Oct 14 (Reuters) - Oil rose above $75 a barrel to
settle at a record high for the year on Wednesday as economic
optimism hinted at a recovery in global energy demand.
The Dow Jones industrials hit the 10,000 mark on Wednesday
for the first time since October 2008 on better-than-expected
company results and U.S. retail sales data. []
U.S. crude <CLc1> settled up $1.03 at $75.18 a barrel, the
highest settlement since October 14, 2008. Brent crude <LCOc1>
settled up 70 cents to $73.10.
Support was provided by the weak dollar which slipped to
its lowest in more than a year, making dollar-denominated
commodities like oil and gold more affordable for holders of
other currencies.
"The dollar is weak and people are buying commodities,
that's by far the sole and exclusive reason we've seen behind
the crude rally today," said Tom Knight, broker at Truman
Arnold in Texarkana, Texas.
"There are those who also see the rally in equities as
supportive, as it raises hopes for improving oil demand."
Oil has more than doubled from below $33 in December amid
hopes of economic recovery, a rally many say has run ahead of
weak oil demand, high inventories and abundant supply.
"The recent rise in oil prices is not driven by
fundamentals but by financial market developments and hopes
that oil demand will recover sooner rather than later," said
Carsten Fritsch, analyst at Commerzbank. "But we still need
some confirmation of this hope."
Some of that confirmation came on Tuesday when producer
group OPEC became the latest forecaster to bump up global oil
demand estimates for this year and 2010. []
"The market is increasingly recognizing that oil demand is
indeed recovering," said Mike Wittner at Societe Generale.
"That's based on two things -- stabilisation in U.S. demand and
strong growth in Chinese demand.
"But it's a bit of a stretch to say that slowly improving
fundamentals have caused oil prices to go up by $5 in the past
week. The dollar-inflation story has been a part of that," he
added.
CHINESE IMPORTS
Asian and European data on Wednesday supported a more
optimistic view of the economy.
Chinese trade figures provided fresh evidence of recovery
in the world's second-largest oil user, while oil data showed
strong year-on-year growth in China's oil imports in September.
[] []
And Euro zone industrial output accelerated month-on-month
in August, while July production was revised upwards, providing
evidence the area's economy is likely to have started growing
in the third quarter. []
Earnings are due this week from several major U.S.
companies, and the oil market is tracking results for signs of
economic rebound.
JPMorgan Chase & Co <JPM.N> reported a sharp rise in
third-quarter results, helping to bump up U.S. stocks on
Wednesday. []
Cold weather in the United States has also supported
prices. Heating demand will be higher than normal this week,
the National Weather Service said on Monday. []
U.S. inventory data from the American Petroleum Institute
was due later on Wednesday, the latest indication of demand in
the world's top consumer. A Reuters poll forecasts a
700,000-barrel rise in crude stocks. []
Analysts who use past price moves to predict future
direction said a further rally would depend on U.S. crude, also
known as WTI, closing above resistance at $75.
"The advance in WTI is in our view purely technical and
dollar linked -- hence reversals can be sharp when and if the
dollar stops to fall off the cliff," said Olivier Jakob,
analyst at Petromatrix.
(Additional reporting by Gene Ramos and Robert Gibbons in New
York,
Alex Lawler in London, and Jennifer Tan in Singapore;
Editing by John Picinich)
