Oil climbs to $60, focus on gasoline stock draw

By Angela Moon

SEOUL, March 22 (Reuters) - Oil prices extended gains above $60 on Thursday, fuelled by a sharper-than-anticipated fall in U.S. gasoline stocks that heightened fears over a summer supply squeeze in the world's biggest consumer.

U.S. light, sweet crude for May delivery CLc1 was up 42 cents at $60.03 a barrel by 0316 GMT, while Brent crude LCOc1 was up 43 cents at $61.20 a barrel.

U.S. gasoline inventories fell last week by 3.4 million barrels, twice the volume predicted by analysts, government data showed on Wednesday. That overshadowed a bigger-than-forecast 4.0 million barrel rise in crude oil stocks. [EIA/S]

"The drawdown was unexpectedly steep, almost twice the amount expected, and the market is responding to that," said Koo Cha-Kwon, analyst at the Korea National Oil Corp. (KNOC).

Distillate stocks fell by a larger-than-expected 1.7 million barrels, marking an eight consecutive weekly decline.

Refinery glitches, unusually early maintenance and robust demand growth have caused gasoline stocks to fall for six weeks in a row, raising concerns of a crunch leading into the summer driving season in the world's top consumer.

Critically, gasoline blending imports necessary for summer grade gasoline reached their lowest level since last October.

Doug Leggate of Citigroup Investment Research said forward demand cover for gasoline and distillates continues to trend towards the bottom of the normal seasonal range.

Oil prices have bounced between $58 and $62 a barrel since early February as dealers play it safe ahead of the weak-demand spring season, but summer factors will soon come into focus.

London-based forecaster Tropical Storm Risk said the six-month hurricane season, which begins on June 1, was expected to bring 17 tropical storms, of which nine will strengthen into hurricane winds of at least 74 miles (119 kilometers) per hour, raising the risk of oil disruptions. [nN21299875]

OPEC, which pumps over a third of the world's crude, agreed last week to keep current output restraints in place for now, but ministers have said they could take action before their next scheduled meeting in September if necessary.

((Editing by Jacqueline Wong; angela.moon@reuters.com; angela.moon.reuters.com@reuters.net; 82-2-3704-5653)) Keywords: MARKETS OIL

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