* US crude stockpiles fell 4.7 mln bbls last week-EIA
* Coming up: U.S. Fed June meeting minutes, 2 p.m. EDT
Wednesday
(Updates market activity, adds analysts quotes and details)
By Gene Ramos
NEW YORK, July 11 (Reuters) – Crude oil futures gained more
than 2 percent on Wednesday in volatile, low volume trading as
investors awaited the release of the June meeting minutes of the
U.S. Federal Reserve that is hoped to show more signs of
stimulus to help the weakening U.S. economy.
U.S. government petroleum inventories showed a drawdown last
week of 4.7 million barrels, almost four times the forecast in a
Reuters poll, but it was overshadowed by larger-than-expected
gains in gasoline and distillate stockpiles.
The bulk of the drawdown was on the U.S. West Coast, a
region not geographically connected to other petroleum regions,
data from the U.S. Energy Information Administration showed,
limiting impact on U.S. crude futures prices.
By 1:40 p.m. EDT (1740 GMT), Brent crude for August delivery
was up $2.08 at $100.05 a barrel, after hitting an
intraday high of $100.30.
U.S. crude gained $2.05 at $85.96 a barrel, after
hitting a session high of $86.49.
“There may be some optimism on hopes for stimulus for the
Federal Reserve, but the market is well supplied and volumes are
very low, so I think people are just waiting to see,” said Rob
Montefusco, trader at Sucden Financial.
Oil trading volumes were thin, with Brent crude down 40
percent from its 30-day average and U.S. crude off 45 percent
from its 30-day volume, according to Reuters data.
The Fed will release minutes of its June meeting at 2:00
p.m. EDT (1800 GMT) and investors will closely watch for any
hints of another round of asset buying in the coming months.
The Fed last week decided to extend a bond
maturity-extension program called Operation Twist. But doubts
remain as to Twist’s effectiveness.
Oil fell more than 2 percent on Tuesday after a strike by
Norway’s offshore oil workers ended when the government ordered
compulsory arbitration, easing fears that North Sea supplies
would tighten. Data also showed that China’s oil imports fell in
June, reinforcing fears of a global economic slowdown hurting
fuel demand.
TECHNICALS, BUYING OPPORTUNITY
Some analysts attributed part of the day’s rebound in oil
prices to technical support and investors repositioning after a
recent fall in prices.
“U.S. crude broke above its Tuesday high of $85.95 and hit
buy stops,” said Addison Armstrong, senior market research
director at Tradition Energy in Stamford, Connecticut.
Some investors also think that after recent lows were hit,
crude futures are a good buy, being still in a big discount from
the highs for the year, said Rich Ilczyszyn, chief market
strategist at iiTrader.com in Chicago.
“People are extending their long positions, with (U.S.
crude) prices aiming for $89,” he added.
DEMAND OUTLOOKS
Prices were up despite lower global oil demand growth
forecasts from the EIA and the Organization of the Petroleum
Exporting Countries (OPEC).
The EIA cut its world oil demand growth forecast for 2012
and 2013 while OPEC said that demand growth will slow in 2013
from what is already a weak level this year. The group, which
produces a third of global oil, said daily average demand for
its crude would stay below its current production levels.
(Additional reporting by Robert Gibbons in New York, Julia
Payne and Simon Falush in London, Florence Tan in Singapore;
editing by Jim Marshall and Marguerita Choy)
