| GEO Business|
Oil edges higher, supported above $75
| Updated at: 1049 PST, Wednesday, September 22, 2010|
SINGAPORE: Oil rose past $75 on Wednesday, as a weaker dollar allowed it to shrug off an industry report showing surprise gains in U.S. inventories.
The outlook for oil demand in the United States remained sluggish after the Federal Reserve on Tuesday stopped short of laying out a timetable to provide more stimulus to the economy, following a one-day meeting to set policy.
But confirmation by the Fed that overnight interest rates will remain near zero and expectations the U.S. central bank would print more dollars sent the greenback to a seven-week low against the euro. A weaker dollar means improved oil-purchasing power for holders of other currencies.
U.S. crude for November, the front-month contract after October went off the board on Tuesday, rose 33 cents to $75.30by 0517 GMT, having slipped as much as 32 cents earlier. ICE Brent for November added 8 cents to $78.50.
"Towards the next two weeks, oil prices will be supported by the weak dollar," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage.
Japanese Prime Minister Naoto Kan said Tokyo was ready to act for a second time since 2004 if the yen moved sharply, keeping traders on guard against further intervention.
U.S. crude inventories rose by 2.2 million barrels last week, against expectations for a 1.9-million barrel drop, as imports increased despite an outage on a pipeline carrying Canadian crude to the United States, the American Petroleum Institute (API) said on Tuesday.
"Inventory data has not had so much of an impact on this market," Hasegawa said. "Generally speaking, crude oil has been moving around $75 for a long time, so data showing an inventory increase cannot push prices out of this range."
Gasoline stocks rose by 2.4 million barrels, the API said, against analysts' forecast for a 300,000 barrel decline. Distillates including heating oil and diesel rose by 2.5million barrels, versus expectations of a 200,000 barrel gain.
Government statistics on inventories and demand will follow from the U.S. Energy Information Administration on Wednesday at1430 GMT.
In equity markets, Asia ex-Japan stocks rose 0.7 percent to a near two-year high, though trading volumes were thinned out by holidays, while U.S. stock futures climbed 0.5 percent.
Gold was in sight of $1,300 an ounce, having hit a record high overnight after the Fed said it was ready if needed to add more stimulus and that inflation was running below where it would like it to be.
Weather forecasters were closely monitoring a tropical wave in the southeastern Caribbean that is producing showers and thunderstorms over much of the Windward Islands as it moves westward. In a couple of days, it is expected to become a tropical depression -- one step below tropical storm strength.