* Oil up $1, extending gains triggered by bullish U.S. data
* Conflict between Georgia and Russia lends support
* Faltering global growth may limit sharp price rises
(Updates prices, adds comment, previous SINGAPORE)
By Santosh Menon
LONDON, Aug 14 (Reuters) - Oil rose by more than $1 to above
$117 a barrel on Thursday, building on gains triggered in the
previous session by a larger-than-expected drop in U.S. crude
and gasoline inventories, and disruptions to Caspian supplies.
U.S. crude <CLc1> was up 50 cents at $116.50 by 0935 GMT, on
top of a $3 rise on Wednesday. London Brent <LCOc1> climbed 51
cents to $113.98.
"Fundamentals certainly warrant a rebound," said Jan Stuart,
economist at UBS, adding however that oil markets still looked
vulnerable in the near-term.
"And fundamentals news may continue to matter very little
until markets get out of their deep, bearish rut," he added.
Oil prices leapt on Wednesday after U.S. government data
showed crude stocks in the world's top energy consumer dropped
400,000 barrels last week, while gasoline inventories fell by
6.4 million barrels.
The fall in gasoline stocks was much larger than analysts'
expectations of a 2.1-million-barrel decline. Distillate stocks
also unexpectedly fell.
Disruptions to energy exports from the Caspian region also
underpinned prices as Western powers tried to shore up support
for a shaky ceasefire between Russian and Georgian troops around
the breakaway region of South Ossetia. []
Georgia had accused Russia of breaking the ceasefire in
their six-day-old conflict on Wednesday, and U.S. President
George W. Bush demanded Moscow resolve a crisis that has
strained relations with the United States.
BP <BP.L> has closed an oil pipeline and a natural gas
pipeline running from its Caspian Sea fields through Georgia but
said neither had been damaged.
A third BP pipeline that runs through Georgia, the
Baku-Tblisi-Ceyhan oil pipeline, was shut last week following an
explosion in Turkey. Repairs have begun on the pipeline, but it
is still not known when it will reopen.
Oil is way off its peak of $147.27 a barrel hit in mid-July,
and analysts have said it is unlikely to move back to near that
level anytime soon.
"The conflict in Georgia does not have that much impact,"
said Gerard Burg, a commodities analyst at National Australia
Bank in Melbourne.
High energy prices in many parts of the world have prompted
motorists to drive less, slashing demand.
The U.S. Transportation Department on Wednesday said
Americans drove 12.2 billion miles, or 4.7 percent, less in June
compared with a year earlier. It was the eighth month in a row
that driving had declined.
(Additional reporting by Seng Li Peng in Singapore; editing by
James Jukwey)
