UPDATE 6-Oil jumps on dollar’s weakness, China imports

* Dollar weaker on monetary easing expectations, lifts oil

* China Sept crude imports up 35 pct vs yr ago, boosts oil

* Coming Up: U.S. API oil data 4:30 p.m. EDT (2030 GMT)
(Recasts, updates prices, market activity, changes byline and
moves dateline from LONDON)

By Robert Gibbons

NEW YORK, Oct 13 (BestGrowthStock) – Oil prices rose for a third
straight day on Wednesday as the dollar weakened on reinforced
expectations of more monetary easing by the U.S. central bank
and on news that China’s crude imports jumped in September.

The U.S. dollar fell against most currencies after minutes
from the Federal Reserve’s September meeting released on
Tuesday reinforced expectations that there will be more
monetary easing in the United States.

Oil brokers and analysts said the euro’s failure early on
Wednesday to hold above the key psychological $1.40 mark had
limited the losses by the dollar and gains by oil.

U.S. crude for November (CLc1: ) delivery rose $1.45, or 1.78
percent, to $83.12 per barrel by 12:10 p.m. EDT (1610 GMT),
having traded from $81.68 to $83.45. In London, ICE Brent
November crude (LCOc1: ) rose $1.23, or 1.47 percent, to $84.73 a
barrel.

“It’s mainly the dollar, which weakened on the expectation
there will be quantitative easing,” said Chris Dillman, analyst
at Tradition Energy in Stamford, Connecticut. “The IEA raised
its (2010) demand expectation a little and the Chinese imports
number helped and the stock market is up.”

The three major U.S. stock indexes gained 1 percent on the
rising expectations for more quantitative easing by the Federal
Reserve and supportive economic data from China that boosted
industrial shares. [.N]

“QE2 is influencing prices via the U.S. dollar, on
expectations that further easing will push the dollar lower and
send oil rising,” Commerzbank analyst Carsten Fritsch said.

A weak dollar can lift oil prices by making
dollar-denominated crude less expensive for buyers using other
currencies, lowering the value of greenbacks paid to producers
and attracting investors looking to shift from cash to
commodities.

(Graphic oil vs euro: http://link.reuters.com/bet38p)

Oil prices were supported early on Wednesday by data
showing China’s crude oil imports rose 35 percent in September
from a year earlier. [ID:nTOE64607F] The International Energy
Agency said China had overtaken the United States as the
world’s largest energy consumer. [ID:nLDE69B0SN]

The IEA on Wednesday said oil demand growth was expected to
accelerate for the rest of 2010, but the agency revised lower
its demand expectation for 2011. [ID:nLDE69C0NE]

The U.S. Energy Information Administration on Wednesday cut
its 2011 oil demand growth forecast slightly, but also raised
its 2010 forecast. [ID:nWALDLE6OM] The EIA also raised its 2010
non-OPEC oil output growth expectation. [ID:nN13249765]

French unions extended a rail strike into a second day and
blockaded oil refineries to protest pension reforms, but there
were signs the stoppages could be losing steam as broad
participation wavered. [ID:nLDE69C247]

The IEA said France has tapped emergency oil stocks as the
country copes with a near halt in oil refining due to strikes
at refineries and its top oil port. [ID:nLDE69C0XH]

All of this data arrived in time to be mulled by oil
ministers of the Organization of the Petroleum Exporting
Countries meeting in Vienna on Thursday for the first time in
seven months.

OPEC has signaled it will keep output targets steady. Saudi
Arabia Oil Minister Ali al-Naimi on Monday described the oil
market as “well balanced.” [ID:nLDE69B1M4]

U.S. INVENTORIES

While the dollar’s lower value helped push oil prices up,
traders and analysts remain concerned about high U.S. oil
inventories and tepid demand.

A Reuters analyst survey yielded a forecast for U.S. crude
inventories to have risen last week, while stockpiles of
distillates, including heating oil and diesel fuel, and
gasoline stockpiles declined. [EIA/S]

Industry group the American Petroleum Institute’s weekly
inventory report was set to arrive at 4:30 p.m. EDT (2030 GMT)
on Wednesday, followed by government inventory and demand data
from the U.S. EIA on Thursday at 11 a.m. EDT (1500 GMT).

The reports were delayed a day because of Monday’s U.S.
Columbus Day holiday.
(Additional reporting by Zaida Espana in London and Alejandro
Barbajosa in Singapore; Editing by Walter Bagley)

UPDATE 6-Oil jumps on dollar’s weakness, China imports