* U.S. crude inventories fall, API says; price rises
* U.S. EIA raises 2010 world oil demand forecast
* Dlr on back foot, commodity currencies shine
(Updates prices, adds Asian stocks performance)
By Fayen Wong
PERTH, Oct 7 (Reuters) - Oil prices rose for the third day
and topped $71 a barrel on Wednesday, as an industry report
showing a small drawdown in U.S. crude stockpiles last week fed
optimism for a recovery in energy demand.
A second day of gains for Asian shares on growing
confidence in a strengthening global recovery gave oil prices
an extra lift.
U.S. crude for November delivery <CLc1> rose 52 cents to
$71.40 a barrel by 0655 GMT, adding to Tuesday's gains of 47
cents. London Brent crude <LCOc1> rose 61 cents to $69.17.
Wednesday's oil gains followed a report by the American
Petroleum Institute saying crude stocks fell 254,00 barrels in
the week to Oct. 2, defying forecasts for a 2.2-million-barrel
increase in a Reuters poll of analysts. []
Distillate stocks fell 2.9 million barrels, countering
expectations for a 300,000-barrel build, while gasoline stocks
rose 544,000 barrels, against estimates for a
1.0-million-barrel increase.
The API report is seen as a precursor to the more
authoritative data issued by the U.S. Energy Information
Administration (EIA), which will be released at 10:30 am EDT
(1430 GMT) Wednesday.
The EIA also raised its global oil demand estimate by
170,000 barrels a day for the fourth quarter and said it
expected consumption to rise by 1.1 million bpd next year,
versus earlier expectations of a 910,00 bpd rise.
[]
Over the last two weeks, oil has rebounded from an 11-week
low of around $66 in late September back towards the $70-level,
but some analysts caution it could lose its footing in the near
term.
"Oil looks like it's on shaky ground as we approach the
U.S. third quarter reporting season. A lot of near term price
gains have been won off a rebounding equity market," said Mark
Pervan, a commodities analyst at the Australia & New Zealand
Bank.
"I suspect the third-quarter reporting card will struggle
to match the impressive second-quarter results, which were
mainly driven by one-off aggressive cost cutting."
After having jumped about 40 percent in the second quarter,
oil prices have squeezed out a gain of only 1 percent in the
September quarter, trading in a band of between $65-$75.
While the global economy is healing from its worst
financial crisis since the Great Depression, the economic
recovery, along with energy demand, is still fragile, analysts
have said.
A U.S. Federal Reserve official said on Tuesday that while
the U.S. economy was clearly rebounding, it was too soon to
begin to withdraw the Federal Reserve's massive support.
[]
Asian shares pushed up about 1.4 percent on Wednesday, with
Taiwan's benchmark index nearing a 16-month high, as growing
confidence about the global economic outlook boosted resource
and financial companies. []
However, the U.S. dollar was again under pressure, with
gold <XAU=> trimming some gains but still hovering near the
all-time high of $1,043.45 hit on Tuesday.
(Reporting by Fayen Wong; Editing by Michael Urquhart)
