FOX: Oil set to gain most in 7 months on lower stocks, dollar
By Florence Tan
SINGAPORE, Sept 30 (Reuters) - U.S. crude on Thursday isset to close September with the strongest gain in seven monthsafter stockpiles at the world's largest consumer declined whilea weak dollar lifted most commodities.
U.S. West Texas Intermediate crude oil futures for Novemberremained unchanged at $77.86 a barrel at 0235 GMT, afterpocketing gains of more than 2 percent to settle at a 7-weekhigh on Wednesday.
ICE Brent for November rose 21 cents to $80.98 a barrelafter breaking above $80 for the first time since August.
"WTI went above the 200-day moving average and it may tryto test above $78 today," said Ken Hasegawa, commodities salesmanager at Newedge Japan.
Brent's break above $80 would "make some room for furthergains to $82-$83", he said.
U.S. crude stocks fell more than expected while oil productinventories slid against expectations of rise in suppliesboosted market sentiment on Wednesday.
Trading volume in the United States spiked to more than700,000 lots with activity picking up just before midday as WTIcrude futures traded above their 200-day moving average of$77.51 per barrel on Wednesday.
A weaker dollar and possible gains in gold may also allowcrude to rise further, Hasegawa said.
The dollar held near a five-month low against the euro onexpectations of more Federal Reserve easing while gold stayednear Wednesday's record high.
The Reuters-Jefferies CRB index hit 8-�� month highs for asecond straight session on Wednesday and was poised to end thethird quarter up 10 percent.
However, U.S. crude prices are likely to remain cappedbelow $80 as oil inventories are still high, Hasegawa said.
"There's no fear on supply shortage at the moment. I don'tthink market will go to $80-$90 levels," he said.
Oil prices have stayed between $70 to $80 per barrel formost of 2010, a range that oil producers in the Organization ofthe Petroleum Exporting Countries have said they favour. (Editing by Ed Lane)
