NYMEX-Crude up despite build, on mogas draw, dollar

NEW YORK, Sept 30 (Reuters) - U.S. crude oil futures surged
more than 3 percent on Wednesday, despite government data
showing crude inventories increased more than expected last
week, supported by a surprise drawdown in gasoline supplies and
a weakening dollar.

Gasoline futures extended gains as data from the U.S.
Energy Information Administration showed weekly gasoline demand
jumped as supplies were drawn down.

Heating oil futures also gained more ground and also
supported crude as inventory data showed that distillate
supplies rose by a smaller-than-expected volume.

Front-month October gasoline and heating oil contracts are
expiring at the close, causing volatility.

"The market is reacting positively to the gasoline demand
uptick, with the EIA reporting a drawdown of 1.6 million
barrels in gasoline stocks last week. At this point, energy
futures are congested and range-bound and the question is
whether positive prices can be sustained in the face of a
sell-off on Wall Street," said Tom Knight, trader at Truman
Arnold in Texarkana, Texas.

U.S. stocks fell sharply as an unexpected fall in business
activity in the U.S. Midwest sparked worries about the pace of
economic recovery. [.N]

The U.S. dollar slipped against most major currencies,
undermined by a mixed reports suggesting that the U.S. economy
was still on a generally stable path to recovery.[USD/]

PRICES

* On the New York Mercantile Exchange at 11:40 a.m EDT
(1540 GMT), November crude CLX9 was up $1.90, or 2.85
percent, at $68.61 a barrel, trading from $66.22 to $68.91.

* In London, November Brent crude LCOX9 was up $1.78, or
2.72 percent, at $67.27 a barrel, trading from $65 to $67.50.

* NYMEX October RBOB RBV9 surged 6.29 cents, or 3.86
percent, to $1.6910 a gallon, the session high. It earlier
traded as low as $1.6301.

* NYMEX October heating oil HOV9 leaped 6.51 cents, or
3.64 percent, to $1.7657 a gallon, trading from $1.6861 to
$1.7693.

* The November/November RBOB crack spread <0#RB-CL=R> was
at $2.77, after ending at $2.22 on Tuesday. The
November/November heating oil crack spread <0#CL-HO=R> was at
$6.41, after ending at $5.81 on Tuesday.

* The spread between the current front month and the
five-year forward crude contract CLc61 was at $13.09, based
on the November 2014 contract Tuesday settlement at $81.70. The
spread ended Tuesday at $14.99.

TECHNICALS

NYMEX crude 10-day/20-day moving average: $68.76/$69.38

Technical support/resistance:

NYMEX crude: $65.05/$68.45

NYMEX heating oil: $1.6495/$1.7790

NYMEX RBOB: $1.5740/$1.7050

For a full report on technicals, click on [ID:nLU120709]

MARKET NEWS

* EIA data showed crude stocks rose 2.8 million barrels to
338.4 million barrels last week, far bigger than the forecast
for a 600,000-barrel increase in a Reuters poll. The gain
matched the increase reported by the American Petroleum
Institute on Tuesday. [EIA/S[

* Crude oil stocks at the NYMEX delivery hub in Cushing,
Oklahoma, fell 1.6 million barrels to 26.5 million barrels.

* Distillate stocks, which include heating oil and diesel
fuel, rose 300,000 barrels to 171.1 million barrels, much
smaller than the forecast for a 1.2-million-barrel increase and
also much less than the API's 2.3-million-barrel build.

* Gasoline supplies fell 1.6 million barrels to 211.5
million barrels, against the forecast for a rise of 1.0 million
barrels and just below the API's report of a decline of 1.7
million barrels.

* Gasoline demand rose 336,000 barrels per day to 9.13
million bpd.

* Refinery utilization fell 1.0 percentage point to 84.6
percent of capacity, EIA data showed, double the forecast for
an 0.5 percentage point decline.

* The Institute for Supply Management-Chicago's business
barometer fell to 46.1 in September, indicating the Midwest
region's economy contracted. [ID:nN3095624]

* The U.S. economy contracted at a slower pace than
previously thought in the second quarter, but there was a
decline in private payrolls in September. [ID:nN30198553]

* Iran said on Wednesday it viewed talks with six world
powers an "opportunity and a test," while the United States
weighed sanctions. [ID:nLU179342]
(Reporting by Gene Ramos and Robert Gibbons; Editing by Walter
Bagley)